The Sensex was down 195 points at 27,506.46 and the Nifty also slipped 57 points at 8,267.
Benchmark indices reversed gains to end lower after rising for three straight sessions amid a volatile day in which traders remained cautious ahead of the expiry of monthly equity derivatives contracts due tomorrow.
Profit-booking in bank shares and weakness in metal, information technology and select index heavyweight stocks dragged the markets down.
The 30-share Sensex ended 195 points lower at 27,506, while the 50-share Nifty closed down 57 points at 8,267.
In the broader market, BSE midcap index performed better than the front-liners with a loss of 0.3% while BSE smallcap index underperformed with a loss of around 0.6%. Market breadth in BSE ended weak with 1,850 declines against 1,072 advances.
The winter session of Parliament ended today after passing a record number of 18 legislations, including amendment bills on coal mine allocation and labour laws, over 22 sittings.
However, progress on key reform proposals, particularly the Insurance Laws (Amendment) Bill that would have enabled the insurance industry to have up to 49% foreign investment, failed to meet market expectations.
On the political front, BJP's lead in elections in Jharkhand and Jammu and Kashmir is expected to keep sentiments boosted in later sessions as experts believe BJP's win in these state elections will strengthen the central government allowing smoother rollout and execution of reforms.
Meanwhile, selling by foreign institutional investors continued unabated and they were net sellers in Indian equities worth Rs 335.24 crore on Monday, as per provisional stock exchange data. Buzzing Stocks All the sectoral indices ended weak.
BSE Metal index, down around 2%, lost the most followed by BSE Consumer Durables and Capital Goods indices which lost around 1.4% each.
However, a handful of stocks stood out for their positive performance in a dull market. NTPC gained around 3%.
The company earlier today held a meeting of its Board of Directors to consider, among other things, a proposal for issuing Bonus Debentures to its members, as the Company has entered its 40th year of operations and is keen to reward its members for their continued support.
The company has also emerged as the only bidder for the Cheyyur Ultra Mega Power Project (UMPP) in Tamil Nadu.
The other seven potential bidders, all from the private sector, withdrew from the race citing regulatory issues in the bidding format.
Cipla gained around 2% after company's South African subsidiary won R2 billion share of the South African Government’s 2015-17 National ARV tender.
Bajaj Auto gained around 2%. According to media reports, Bajaj Auto plans to launch new economy motorcycles such as new self-start Platina and two more Discover variants.
Among financials, HDFC lost around2% after paring early gains.
The mortgage lender had gained on launching a fixed interest rate home loan product for a limited period as part of New Year celebrations to attract customers. Other bank shares too came under pressure on profit-booking.
ICICI Bank lost more than 1.5% while Axis Bank lost around 06% and SBI lost 0.3% Bank shares were trading firm in early trade after the Reserve Bank of India (RBI) tightened the screws on bank customers who default on loans despite having the ability to repay their debts.
As per new RBI norms, banks can now classify errant borrowers, particularly promoters of companies that have not repaid dues, as ‘non-cooperative’, making it difficult for them to get fresh loans. The new category is in addition to the one on wilful defaulters.
Oil and shares closed mixed. RIL and ONGC lost more than 1% each while GAIL ended higher by 0.3%. Weakness in global commodity prices kept the metal shares under pressure; Sesa Sterlite declined more than 3% while Tata Steel and Hindalco lost around 2%and 1.5% each.
Among other shares, Gujarat Gas Company surged 18%, also its record high on BSE, in otherwise weak market on back of heavy volumes. Global Markets Japanese markets were closed today on account of holiday. Hong Kong shares edged down on Tuesday, erasing gains from the morning session, dragged down by the financial sector.
Chinese stocks have declined amid volatile trading. Hang Seng and Shanghai Composite indices ended the day lower losing 0.3% and 3% each.
European markets have opened higher on speculations that the European Central Bank is set to start buying euro government bonds and news of political stability in Greece.
Meanwhile, French third-quarter GDP rose by 0.3% compared to the preceding quarter, according to the report of French National Institute for Statistics and Economic Studies. FTSE 100 and CAC 40 indices have gained around 0.1% and 0.2%each while German DAX is marginally down.
