The domestic equity market took a breather on Tuesday after a five-day rising spree as investors booked profits in metal, financials and auto counters, amid weak cues from international markets after IMF lowered its global growth projections for 2019 and 2020.
The 30-share BSE Sensex dropped 134.32 points to end at 36,444.64, while the broader NSE Nifty finished 39.10 points lower at 10,922.75.
Participants were seen taking money off the table after the recent rally, even as the wider sentiment remained positive, underpinned by better-than-expected Q3 earnings by several bluechips.
The BSE Sensex, after resuming higher at 36,649.92, advanced to 36,650.47 on buying by domestic institutional investors (DIIs) as well as retail participants.
However, market quickly slipped into the negative zone as investors chose lock in gains in recent outperformers, dragging down the key benchmark to a low of 36,282.93 before ending at 36,444.64 down 134.32 points, or 0.37 per cent.
The gauge had rallied over 725 points in the previous five sessions.
Likewise, the 50-stock NSE barometer Nifty finished 39.10 points, or 0.36 per cent, down at 10,922.75 after hitting the day's high of 10,949.80 and a low of 10,864.15.
Brokers said investors turned cautious and preferred to log profits in recent gainers, dragging down key indices.
"The market tracked other Asian markets following IMF’s weak forecasts of global growth prospects," said Paras Bothra, President, Equity Research, Ashika Group.
"While India’s economic forecasts were retained, concerns were raised over the difficulties in containing the fiscal deficit. Continued weakness in the rupee favoured IT and Pharma stocks while majority of other sectors were under pressure," he added.
The IMF lowered its global growth projections for 2019 and 2020 to 3.5 per cent and 3.6 per cent respectively, citing a slowdown in several advanced economies around the world more rapidly than previously anticipated.
Meanwhile, India is projected to grow at 7.5 per cent in 2019 and 7.7 per cent in 2020, an impressive over one percentage point ahead of China's estimated growth of 6.2 per cent in these two years, the IMF said Monday, attributing the pick up to the lower oil prices and a slower pace of monetary tightening.
The International Monetary Fund in its January World Economy Outlook update on Monday said India would remain the fastest growing major economies of the world.
Foreign portfolio investors (FPIs) continued their selling activity on domestic bourses here. They sold shares worth a net Rs 299.79 crore, while domestic institutional investors (DIIs) made purchases to the tune of Rs 520.80 crore Monday, provisional data showed.
Stocks in the metal segment faced heavy selling after most base metals weakened at the London Metal Exchange (LME) on demand concerns after economic growth in top metals consumer China slowed to its weakest in 28 years.
The laggards in the Sensex kitty were Vedanta (3.50 per cent), Tata Steel (3.13 per cent), M&M (3.08 per cent), HCL Tech (2.18 per cent), Bharti Airtel (2 per cent), Maruti Suzuki (1.84 per cent), L&T (1.02 per cent), Asian Paint (0.99 per cent) and HDFC (0.86 per cent).
Other losers were PowerGrid (0.73 per cent), SBI (0.70 per cent), HDFC Bank (0.63 per cent), ICICI Bank (0.61 per cent), Coal India, Tata Motors, TCS, NTPC, IndusInd Bank and ONGC.
On the other hand, Sun Pharmaceuticals emerged as the top gainer by surging 4.95 per cent after it replaced its domestic formulations distributor Aditya Medisales with its own subsidiary in the backdrop of a second whistleblower complaint filed against the company.
Other winners were Kotak Bank up 1.92 per cent, Bajaj Finance 1.07 per cent, Hero MotoCorp 1.05 per cent, Bajaj Auto 0.35 per cent, Axis Bank 0.23 per cent, Infosys 0.22 per cent, HUL 0.09 per cent, ITC Ltd 0.03 per cent and RIL 0.02 per cent, cushioning the fall.
Sectorally, BSE metal fell the most at 2.31 per cent, followed by auto 0.86 per cent, infrastructure 0.60 per cent, capital goods 0.42 per cent, power 0.26 per cent, teck 0.13 per cent and bankex 0.13 per cent.
While healthcare index surged 1.17 per cent, realty 0.91 per cent, consumer durables index rose 0.90 per cent and oil & gas 0.41 per cent.
The broader markets too succumbed to profit-booking, with the small-cap index and mid-cap indices falling up to 0.49 per cent.
In global markets, most of the other Asian markets ended lower and European shares too were down in their early deals.
The Shanghai Composite Index dropped 1.18 per cent, Hong Kong's Hang Seng fell 0.87 per cent, Japan's Nikkei shed 0.47 per cent and Korea's Kospi fell 0.32 per cent.
In the euro zone, Frankfurt's DAX was down 0.25 per cent, while Paris CAC 40 shed 0.23 per cent. London's FTSE eased 0.17 per cent.