Meanwhile, caution ahead of the outcome of the Bihar elections has further dampened the sentiments.
However, a stellar performance by auto shares with Tata Motors emerging as the star performer on the back of better-than-expected JLR sales in US capped the downside.
The Sensex closed 37 points lower at 26,553 and the Nifty lost 21 points to end at 8,040.
In the broader market, BSE Midcap index outperformed the largecaps and ended 0.2% higher whereas BSE Smallcap index lost 0.3%.
Market breadth ended negative with 1,269 gainers and 1,462 losers on the BSE.
The rupee has gained 9 paise to 65.55 against the US dollar on selling of the American currency by exporters and banks.
KEY EVENT
India’s services industry expanded at its fastest pace in eight months in October as new business rose with discounting probably stoking demand, a survey showed on Wednesday.
The Nikkei/Markit Services Purchasing Managers’ Index rose to 53.2 in October from September’s 51.3, marking a fourth month above the 50-level that separates growth from contraction.
STOCK TRENDS
8 out of 12 sectoral indices closed in red with BSE IT and Healthcare indices losing 0.5%. However, BSE Auto index outperformed the peers and closed 1.6% higher.
In the auto pack, Tata Motors soared nearly 6% on better-than-expected JLR sales in the US. Meanwhile, Hero MotoCorp reported 11.25 per cent rise in sales at 6,39,802 units in October, its highest ever in a single month and the stock was up 1%. M&M and Bajaj Auto gained 1.9% and 1% each.
The HDFC Group has set up a new fund management company, HDFC Capital Advisors, to launch an offshore real estate fund, according to sources in the know. However, the HDFC twins closed the session with marginal losses.
Tech Mahindra reported revenue and net profit above Street expectations. The good show was supported by operational efficiency and dollar-rupee conversion gains, along with better business from the US. After moving up by 1% , the shares came down on account of profit booking and closed 2.5% lower. Among other IT peers, TCS and Wipro lost between 0.2-0.7% amid an appreciating rupee.
DLF gained over 1.5% after the company recorded a 21% increase in consolidated profit at Rs 131.5 crore during the second quarter of the financial year 2015-16.
GAIL fell 2.4% after it posted a 66% decline in net profit for the quarter ended September on the back of lower price realisation in transmission of Liquefied Petroleum Gas (LPG) and other petroleum products. Among its peers, RIL lost 1.6% amid slide in crude prices.
Nestlé India’s bestselling product Maggi instant noodles is finally ready for a comeback after it cleared a final round of tests at three NABL accredited laboratories. The stock ended the session with marginal gains.
Drug major Dr Reddy's Laboratories signed a pact with Biocodex to market the French-based firm's products in Romania. The stock ended the session with marginal losses.
Among other prominent losers were ICICI Bank, Sun Pharma and Cipla losing between 1-2%.