The losses were led by heavy selling in shares of index heavyweights Reliance Industries and ITC, while the decline in IT stocks also weighed on the benchmarks.
The 50-stock Nifty 50 index ended at 14,146.25, down 53.25 points or 0.4 per cent, snapping a three-day winning streak. The BSE Sensex closed lower after 10 successive days of gains at 48,174.06, down 0.5 per cent.
Following were the major movers and shakers of Wednesday’s trade:
ITC sinks on new policy buzz
Shares of the soap-to-tobacco maker sank 2.9 per cent on concerns that the draft tobacco policy released by the government could have a negative impact on the company’s cigarette business.
Shares of the natural transporter and marketing jumped nearly 4 per cent on optimism that the opening of the Kochi-Mangalore gas pipeline will boost gas volume growth of the company and aid earnings.
IT stocks falter
Nifty IT index ended 1.4 per cent as investors looked to book some profits after the sector’s stellar rise earlier this week.
Cement companies climb on capex hope
Shares of major cement companies like Shree Cement, Ambuja Cements, Dalmia Bharat and JK Cements rose 3-5 per cent on hope that increased government capital expenditure will boost domestic demand for cement.
Metals surge on stimulus bets
Shares of base metal producers rallied on bets that higher government spending at home and the possibility of larger stimulus in the US will help recovery in domestic and export demand, respectively.
Stocks that gave buy signal
As many as 54 stocks on the NSE gave a buy signal based on MACD reading, including prominent names like Reliance Industries, GAIL India, Hindalco Industries, IRCTC and Indus Towers.
The fear gauge India VIX rose nearly 3 per cent as concerns over the implication of the Georgia Senate elections sparked uncertainty among investors.
What lies ahead for the market?
After a day of profit booking, the positioning in the options contracts of Nifty does not paint a pretty picture for the index. Traders aggressively bought 13,800, 13,700, and 13,500 strike price Put options of Nifty50, suggesting likely losses in the session ahead.
On the technical front, analysts said that while the market did manage to pare some of the losses it is still possible that it may see more volatility in the coming days.
“I would advise caution as sharp movements cannot be ruled out. Hence, strict stops should be maintained and traders should initiate long positions only on dips or corrections,” said Manish Hathiramani, technical analyst at Deen Dayal Investments.