Mumbai: The benchmark BSE Sensex wiped out early gains to close 53.60 points lower at 27,876.61 today following selling in key bluechip IT and teck counters ahead of key US Federal Reserve meet.
Despite buoyant sentiment on account of robust manufacturing performance in October, the session advanced mostly in flat-line as traders were in festive mood due to 'Bhai Dooj'.
The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) -- a gauge of manufacturing performance -- rose to 54.4 in October from 52.1 in September, indicative of a robust improvement in manufacturing business conditions in the country. The manufacturing sector growth hit a 22-month high in October.
Investors further treaded water cautiously keeping in view bitter final phase of US presidential election and key central bank meeting in Japan which kept the policy rate steady. Besides, participants are also keenly awaiting the US Federal Reserve meeting, set to begin later in the day, which will provide clues on December rate hike.
Largely good sales figures lifted the auto stocks, while metal stocks gained as China's PPI hit multi-year high.
Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services Ltd, said: "Weak global markets and mixed set of Q2FY17 results are impacting the market mood. In spite of strong PMI numbers in the domestic and Chinese economies the markets did not cheer. This consolidation mode is likely to continue till the US Presidential election and FOMC meet which starts today."
The selling in IT, consumer durables, teck, healthcare and FMCG were offset by buying in metal, auto, power and utilities, while the second-line shares midcap and smallcap shares witnessed some selling.
The Sensex opened higher at 27,966.18 and hovered in a range of 28,029.80 and 27,845.63 before ending at 27,876.61, showing a loss of 53.60 points or 0.19 percent.
While, the NSE 50-share Nifty traded almost flat, up by 0.55 points, or 0.01 percent, today to close at 8,626.25.
Elsewhere, Asian stock ended mixed after the release of encouraging economic data from China and decisions by the Bank of Japan to hold their policies steady.
European stocks were trading mixed as upbeat Chinese data lifted market sentiment and investors focused on fresh batch of earning reports and US Presidential elections.
Key indices saw high intraday volatility throughout the session as trading resumed after a one-day holiday yesterday.
The BSE Mid-Cap index was provisionally off 0.24 percent while the BSE Small-Cap index was 0.19 percent. Both these indices outperformed the Sensex.
Moving to the domestic market, 20 scrips ended in red out of the 30-share Sensex pack while 10 closed in green.
Major losers were Axis bank 2.53 percent, TCS 1.96 percent, Sun Pharma 1.92 percent, Infosys 1.36 percent, Cipla 1.09 percent, Wipro 0.88 percent, ITC 0.85 percent and L&T 0.82 percent.
However, Tata Steel rose by 3.23 percent. The company announced yesterday, that ratings agency Brickwork Ratings downgraded the company's credit rating to BWR AA from BWR AA+, with negative outlook for the unsecured non-convertible debenture (NCD) issues of Rs 4,000 crore.
Among other gainers were HDFC 2.59 percent, NTPC 2.48 percent, Coal India 1.18 percent, Power grid 1.14 percent and HDFC Bank 0.50 percent.
Among the S&P BSE sectoral and industries, IT fell by 1.19 percent followed by consumer durables 1.10 percent, teck 1.06 percent, healthcare 0.83 percent, FMCG 0.76 percent, capital goods 0.64 percent and realty 0.63 percent.
However, metal rose 3.34 percent followed by utilities 0.88 percent, power 0.66 percent and auto 0.40 percent.
The market breadth remained positive as 1,470 stocks ended higher, 1,442 finished in red while 102 ruled steady.
The total turnover decline to Rs 3,318.06 crore from Rs 3,333.13 crore on last Friday.