Small- and mid-cap stocks continued facing selling pressure due to stretched valuations.
Benchmarks retreated for the second day on Thursday as investors stayed on the sidelines ahead of voting on a no-trust motion against the NDA government.
Fresh weakness in the rupee, which again breached the 69-mark against the dollar in intra-day trade, too weighed on sentiment amid a lack of definite buying triggers, brokers said.
Erasing early gains, the Sensex ended lower by 22.21 points at 36,351.23, while the NSE Nifty shed 23.35 points to 10,957.10.
Small- and mid-cap stocks continued facing selling pressure due to stretched valuations.
The opposition's no-confidence motion -- the first since the NDA government came to power four years ago -- would be taken up in the Lok Sabha on Friday.
The Sensex opened higher and advanced to hit a high of 36,515.58, but turned lower in afternoon trade and slipped to 36,279.33. It finally settled at 36,351.23, down 22.21 points, or 0.06 per cent.
The 50-share NSE Nifty ended 23.35 points, or 0.21 per cent lower at 10,957.10. Intra-day, it shuttled between 11,006.50 and 10,935.45.
Meanwhile, domestic institutional investors (DIIs) bought shares worth a net of Rs 111.01 crore, while foreign portfolio investors (FPIs) bought shares worth Rs 95.68 crore on Wednesday, provisional data released by stock exchanges showed.
"Market was range bound with a negative bias due to weakening rupee on account of surge in dollar index and ongoing trade spat. Global cues are not clearly supporting domestic market direction.
"Trade tensions between US and other major economies are keeping investors on edge. Mid and small-cap continued to underperform due to volatile rupee while PSU banks gained in expectation of the government's recapitalisation measures," said Vinod Nair, Head of Research, Geojit Financial Services.
Shares of IT firm Mindtree plunged 8.67 per cent after the company reported a 13 per cent decline in net profit on sequential basis.
In the Sensex kitty, Kotak Mahindra Bank suffered the most by falling 3.69 per cent post lower-than-expected results.
Other laggards were L&T 2.61 per cent, Hero MotoCorp 1.22 per cent, Tata Steel 0.98 per cent, Coal India 0.95 per cent, HDFC Ltd 0.91 per cent, Sun Pharma 0.81 per cent, TCS 0.79 per cent, Power Grid 0.73 per cent, ICICI Bank 0.53 per cent, Infosys 0.44 per cent and NTPC 0.39 per cent.
Bucking the trend, ONGC gained 0.69 per cent after the Cabinet yesterday tweaked pre-1999 oil and gas contracts to provide for proportionate sharing of statutory levies.
The winners list included Vedanta, which rose 2.21 per cent, Yes Bank 1.93 per cent, ITC 1.71 per cent, Bharti Airtel 1.69 per cent, Adani Ports 1.39 per cent, RIL 1.22 per cent, Axis Bank 0.59 per cent and Asian Paints 0.58 per cent, among others.
In sectoral terms, the BSE capital index fell 1.80 per cent, followed by healthcare 1.25 per cent, IT 0.79 per cent, teck 0.62 per cent, power 0.58 per cent, metal 0.52 per cent, bank 0.38 per cent, infrastructure 0.28 per cent, realty 0.17 per cent, PSU 0.12 per cent and auto 0.12 per cent.
Consumer durables, energy, FMCG and oil and gas ended in the green, rising up to 0.99 per cent.
In the broader markets, the BSE mid-cap index lost 0.63 per cent, while the small-cap-gauge shed 1 per cent.
Coming to global markets, most European stocks fell as investors focused on a mixed bag of company results. Asian shares declined.
Japan's Nikkei fell 0.13 per cent, Shanghai Composite Index declined 0.53 per cent and Hong Kong's Hang Seng shed 0.38 per cent.
In the euro zone, Paris CAC was down 0.54 per cent, while
Frankfurt's DAX fell 0.42 per cent in early deals. London's FTSE edged lower by 0.02 per cent.
Photograph: Punit Paranjpe/Reuters
