Experts believe volatility is here to stay for some time, at least till China stabilises and clarity regarding the US Fed's interest rate move emerges.
Urjit Patel as the new RBI governor whose focus is on taming inflation has lowered the probability of interest rate cut soon
The majority in the markets believe that a September lift-off is likely.
Investors engaged in profit booking in the recent gainers at attractive and higher valuations.
In the global markets, the US dollar traded lower in early trade after former US Treasury Secretary Larry Summers withdrew himself from the race to be the next Federal Reserve chairman.
The broader markets ended negatively with mid-caps and small-caps shedding 0.5 per cent on the BSE.
Markets ended higher, amid firm global cues, and are on track for third straight day of gains.
In the metal pack, Tata Steel was up 3.7% while Vedanta was up 1.8% .
.jpg)
The broader markets traded positively with mid-caps and small-caps rising 0.5 per cent each on the BSE.
The upcoming July derivatives expiry later in the week would also add some volatility to the market proceedings.
Sun Pharma was the top gainer after SPARC received Sebi nod to raise up to Rs.250 crore through a rights issue
The 30-share Sensex ended down 261 points at 27,177 and the 50-share Nifty ended down 91 points at 8,214.
Food and fuel are two perennial areas of concern.
'...and defensive until the global macro headwinds turn more benign.'
Bank shares were the top gainer in early trades with Bank of Baroda up over 4%.
Investors still seem to have a disinflation bias to their thinking.
The S&P BSE Sensex ended 46 points lower at 24,824 and Nifty50 settled at 7,555, down by 8 points after hitting intra-day high of 7,600.45.
Sensex gained nearly 0.4% or 96 points at 26087 level while Nifty ended up by 42 points or 0.5% at 7,791.40 level.
All evidence suggests that the US Federal Reserve will raise interest rates soon.
Sensex in green in afternoon trade.
Sanjay Mathur, managing director and head of economics research for Asia Pacific (ex-Japan), Royal Bank of Scotland, tells Business Standard that in the emerging market pack, India needs to learn lessons from Korea and Taiwan, which have managed their economic situations well.
