Domestic equities ended lower on Tuesday, weighed down by financial shares, as the spike in wholesale price inflation to 3-month highs in March could lead to delays in policy rate cuts by the central bank in the near to medium term.
The Sensex lost 144 points or 0.64 per cent on profit booking in blue chips stocks after disappointing inflation data came out. The 30-scrip S&P Sensex (sensitive index) of the Bombay Stock Exchange (BSE), which opened higher at 22,698.09 points, closed at 22,484.93 points, down 144.03 points or 0.64 per cent from its previous close of 22,628.96 points.
The Sensex hit an intra-day high of 22,737.31 points and low of 22,416.24 points.
The index declined 212.72 points at the day's low in afternoon trade and jumped 108.35 points at the day's high in early trade, its highest level since April 10, 2014.
The 50-unit CNX Nifty at NSE lost 43.20 points or 0.64 per cent to settle at 6,733.10, its lowest closing level since April 7, 2014.
The index hit a low of 6,711.75 and a high of 6,813.40 in intraday trade, its highest level since 10 April 2014.
From broader markets, the BSE Mid-Cap index lost 26.47 points or 0.36 percent to settle at 7,311.99, while the BSE Small-Cap index lost 21.68 points or 0.29 percent to close at 7,501.50. Both these indices outperformed the Sensex.
A key factor weighing down the stock market was wholesale price index-based inflation, which rose to a three-month high of 5.70 per cent in March from a nine-month low of 4.68 per cent in February.
That apart, increase in global crude oil prices and weak domestic macroeconomic data weighed on Indian stocks on the first trading session of the week.
Increase in crude oil prices triggered concerns on India's current account deficit and fiscal deficit. Brent and West Texas Intermediate crudes rose to five-week highs on Monday as tensions escalated between Ukraine and Russia.
Market breadth, indicating health of the market was negative as the barometer index of both the BSE and CNX Nifty hit their lowest closing levels in more than a week.
More data released by the government after trading hours on Friday last showed that India's industrial production witnessed surprise contraction in February 2014 as manufacturing activity shrunk.
That data came in after data released during trading hours on Friday, April 11, 2014, which showed that India's merchandise exports declined for the second month in a row in March 2014.
Further, market sentiment was dampened after foreign investors turned net sellers on Friday.
As per the provisional data on the stock exchanges, FIIs were net sellers in Indian equities to the tune of Rs 362 crore on Friday.
On the sectoral front, BSE Bankex, Realty, Metal and Auto indices plunged 1-2 per cent followed by counters like power, oil & gas, healthcare and consumer durables, down 0.4-1.3 per cent each.
However, BSE IT and TECK indices gained nearly 2 per cent each. FMCG index up 0.3 per cent was the only other sectoral index in the green for the day.
Shares of IT companies were firm after Infosys surprised the Street with a 4.1 per cent q-o-q rise in its net profit for the fourth quarter ended March 2014 (Q4) at Rs 2,992 crore. Infosys, Wipro, Tata Consultancy Services added 0.7-4 per cent.
Commenting on the market, Kotak Securities' Sanjeev Zarbade said: “Going ahead, IT stocks could remain in focus as TCS (on Wednesday) and other frontline IT stocks are scheduled to announce numbers.”
The market breadth, indicating overall health of the market was negative with as many as 1,520 shares on BSE dropping and 1,368 stocks rising while a total of 152 scrips remain static or unchanged.