Mumbai: The BSE Sensex on Wednesday tumbled by 208 points to nearly three-week low of 22,277.23, with IT and capital goods stocks coming under severe selling pressure after dimming hopes of rate cut, fund outflows and below normal monsoon forecast hit the investor sentiment.
Profit-booking and selling pressure are likely to continue after the recent rally and markets may witness volatility amid election time and earning season, said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.
The BSE Sensex moved in a narrow range till afternoon deals, but later tumbled on profit-booking. The 30-share index finally ended the day at 22,277.23, a fall of 207.70 points or 0.92 percent. This is the third day in a row the key index is settling the day with losses.
The 50-issue Nifty of the NSE also plunged by 57.80 points or 0.86 percent to end at 6,675.30.
All the three top IT company ended as big losers of the day, ahead of the release of TCS's fourth quarter earnings. Infosys, which yesterday gave a disappointing guidance for the next fiscal, lost 3.19 percent. Wipro was down 2.90 percent while TCS closed lower by 2.51 percent.
India's largest IT company TCS after market hours announced that its Jan-Mar quarter profit rose 48.2 percent to Rs 5,357.61 crore.
Tata Power at 3.61 percent was the biggest loser of the day. State-owned power equipment maker Bhel lost 3.17 percent, L&T 2.87 percent.
Hero MotoCorp at 2.44 percent, NTPC 2.27 percent, HDFC 1.93 percent, Dr Reddy's Lab 1.48 percent and Cipla 0.99 percent were the other big losers.
Brokers said a private weather forecast of below normal monsoon in June-September also had a negative impact on the market.
Capital outflows for the second day in a row also hit the sentiment. Foreign institutional investors (FIIs) pulled out Rs 21.63 crore yesterday, as per provisional data with stock exchanges.
Hopes of a rate cut were further dimmed retail inflation (CPI) inched up to 8.31 percent in March, according to government data released yesterday after market hours.
Wholesale inflation (WPI) also rose to a three-month high of 5.7 percent, according to data released yesterday morning.
India Inc has been demanding that the central bank cut lending rates in view of the slowing economy.
Among the BSE sectoral indices, realty dropped by 3.87 percent, followed by IT at 2.49 percent, consumer goods at 2.47 percent, auto at 2.14 percent, power at 1.86 percent, consumer durables 1.10 percent and Oil&Gas 0.72 percent.
FMCG moved up by 0.63 percent and metal 0.19 percent.
ITC at 1.44 percent and Tata Steel at 1.31 percent were, however, the prominent gainers of the day.
The market breadth remained negative as 1,654 stocks finished in the red while 1,088 stocks ended in the green. The total turnover fell to Rs 2,666.76 crs from Rs 2,875.18 crs yesterday.
Asian stocks closed better as China reported data on economic growth for the January-March period which was better than estimated. Key benchmark indices in China, Hong Kong, Japan, Singapore and Taiwan ended up 0.08-3.01 percent while Kospi ended flat.
European markets too were trading higher. The CAC was up by 0.81 percent, the DAX by 0.84 percent and the FTSE by 0.35 percent.