Mumbai: Erasing the 110-point rise gained on impressive TCS earnings in early trade, the Sensex fell for the third straight day on Friday by closing 19 points lower after investors booked profits amid India's June exports contracting by 5.45 percent due to persisting global economic slowdown.
Brokers said focus has now shifted to inflation data which is scheduled for July 16 and is expected to decide RBI's next move in 1st quarter monetary policy review on July 31.
The BSE benchmark index resumed slightly higher at 17,269.20 and shot up further to a day's high of 17,342.88.
However, the tepid export data sparked off a late-round of selling and the index ended at 17,213.70, a loss of 18.85 points. With this, Sensex has lost 405 points in 3 sessions.
Today's losses were cushioned to some extent by Hero MotoCorp, HDFC Bank, TCS and ONGC shares which gained in the 1-1.4 percent range. Jindal Steel, Hindalco, Tata Power and SBI were among the biggest losers in the 30-share index.
Infosys fell 1.65 percent and continued its downslide for second straight day after losing over 8 percent yesterday.
Metal stocks closed with losses as demand could be hit after reports said China's economy grew the slowest in more than three years in the June quarter, traders said.
"Indian equity markets had a steady start, but the initial gains could not be sustained for the rest of the day," said Milan Bavishi, Head Research, Inventure Growth & Securities.
Traders said FIIs are in a wait-and-watch mode after the government today set up a committee to prepare fresh norms on the controversial GAAR tax provision to bring greater clarity and prepare a roadmap by September 30 for implementation.
Overall, 11 out of 13 sectoral indices closed down with Consumer Durable, Realty and Metal leading the downtrend. On the other hand, FMCG and Oil & Gas sectors closed higher.
The NSE Nifty lost eight points to end at 5,227.25.
Meanwhile, the rupee firmed to 55.34 in afternoon trade today on fresh dollar selling compared to its closing of 55.94 yesterday.
Asian stocks mostly ended higher after China's Q2 GDP growth came in line with market expectations. Key benchmark indices in China, Hong Kong, Indonesia, Japan, South Korea and Singapore rose between 0.02 per cent to 1.54 percent while Taiwan Stock Exchange Weighted Index fell 0.37 percent.
European shares were trading higher as China growth data prompted some to expect further growth stimulus measures. Key benchmark indices in UK, France and Germany were up by 0.39 percent to 0.72 percent.
Back home, out of the 30-share Sensex family, 17 scrips declined while 13 firmed up.
Major losers from the Sensex were Jindal Steel (3.24 percent), Hindalco Industries (2.11 percent), Tata Power (2.08 percent), SBI (1.69 percent), Infosys (1.65 percent), Sterlite Industries (1.34 percent) and Maruzi Suzuki (0.95 percent).
However, Hero MoroCorp rose by 1.38 percent, followed by HDFC Bank (1.21 percent), TCS (1.10 percent) and ONGC (0.92 percent).
Giving outlook on Nifty, Shubham Agarwal, Associate VP & Senior Technical Equities Analyst, Motilal Oswal Securities, said, "Nifty after breaking down from the dead zone of 5260-5350, has been sliding with a negative bias. Multiple studies indicate resistance in the range of 5325-5350. Breach of immediate support at 5228 with a confirmation on India Vix above 19 can drift the index lower to 5150."
Among the BSE sectoral indices today, the BSE-Consumer Durable fell by 1.63 percent, followed by the BSE-Realty (1.37 percent) and the BSE-Metal (1.15 percent).
The market breadth remained negative as 1,474 scrips ended lower while 1,304 stocks finished higher.
"The Presidential elections will be over soon and expectations are that the government will move ahead with reforms. The actions of the government will likely have a bearing on the RBI rate decision," said Dipen Shah, Head of Fundamental Research, Kotak Securities.
The total turnover declined to Rs 1,934.89 crore from Rs 2,189.00 crore yesterday.