Mumbai: Hit by late selling, the benchmark S&P BSE Sensex on Wednesday fell 145 points to a one-week low of 19,294.12 as investors turned cautious ahead of ahead of key economic data due later this week and quarterly earnings.
Weakness in the European markets also triggered selling, which was seen mainly in the refinery, realty, auto, capital goods, PSU, metal and power sectors.
The Sensex resumed higher at 19,482.66 and firmed up to 19,505.93 on sustained buying in view of capital inflows from foreign funds coupled with overnight gains in the US market. The index later declined to 19,237.91, before ending at 19,294.12, a drop of 145.36 points, or 0.75 percent.
The broader Nifty declined 42.30 points, or 0.72 percent, to 5,816.70. The SX40, the flagship index of the MCX-SX, dropped 64.41 points, or 0.56 percent, to 11,533.78.
Reliance Industries and ONGC were among the major losers. Brokers said profit-booking and a fall in refinery stocks mainly pulled down the market, besides a weak global trend following an unexpected fall in China's exports and imports.
"Investors were seen booking profits after yesterday’s rally," said Nidhi Saraswat, senior research analyst at Bonanza Portfolio Ltd. "Weaker Chinese exports data triggered concerns over economic recovery."
Refinery stocks were under pressure after the RBI asked state-run oil companies to buy dollars from a single bank in a bid to curb volatility in the rupee, brokers said.
The Central Statistics Office is scheduled to release consumer price data for June and IIP for May on Friday.
Most Asian stocks gained after an improved economic outlook clinched a fourth day of improvement for US equities yesterday. Key indices in China, Hong Kong, Singapore and Taiwan rose by 0.30 percent to 2.17 percent, while Japan and South Korea eased by 0.34 percent to 0.39 percent.
European stocks reversed initial gains as investors awaited the minutes of the US Fed meeting for further signs of how long the central bank's asset-purchase program will operate. Benchmark indices in UK, France and Germany dropped by 0.32 percent to 0.44 percent. Signs of a lower opening in US index futures also affected sentiment.
In the domestic market, 22 of the 30 shares in the Sensex declined.
The major losers were M&M (2.63 percent), Hindalco (2.58 percent), Bajaj Auto (2.13 percent), Tata Steel (1.97 percent), RIL (1.95 percent), ONGC (1.79 percent), Tata Motors (1.73 percent) and HUL (1.63 percent).
RIL fell after the finance ministry said appropriate action should be taken on suggestions to cap increases in natural gas prices. Tata Motors declined as workers at its Jaguar Land Rover unit decided to go ahead with a strike.
Gainers on the index included Wipro, which firmed up by 1.33 percent, followed by Tata Power (0.88 percent) and TCS (0.6 percent).
Among the sectoral indices, S&P BSE-Refinery dropped by 1.82 percent followed by S&P BSE-Auto 1.5 percent, S&P BSE-Realty 1.32 percent, S&P BSE-PSU 1.02 percent, S&P BSE-Power 0.98 percent and S&P BSE-Capital Goods 0.98 percent.
S&P BSE-Consumer Durables firmed up by 1.95 percent, followed by S&P BSE-IT (0.66 percent) and S&P BSE-Teck (0.27 percent).
The market breadth turned negative as 1,170 stocks closed with losses and 1,145 finished with gains.
Foreign institutional investors were net buyers of Rs 75.46 crore, as per the BSE website.