Domestic equities declined for the third straight trading session on Wednesday on the back of weak global cues and traders unwound their long positions in the absence of institutional buying support.
Investor sentiment was also dampened by Prime Minister Manmohan Singh's comment on the recovery of the economy. Singh in the Lok Sabha on Wednesday said that the economy will return to high growth trajectory within the next 2-3 years and also pointed out that GDP has slowed down in the last couple of years owing to several domestic as well as international factors.
The popular Sensex at BSE fell 202.37 points or 1.03 percent to 19,362.55 points, its lowest closing level since March 6, 2013. The index declined 226.40 points at the day's low in late trade and fell 52.95 points at the day's high in early trade.
The 50-unit CNX Nifty at NSE fell 62.90 points or 1.06 percent to 5,851.20, its lowest closing level since March 6, 2013. This index hit a low of 5,842.25 and a high of 5,893.85 in intraday trade.
So much so, key benchmark indices like Sensex and Nifty hit their lowest level in almost a week. The market breadth was weak with most sectoral indices in red.
Index heavyweight and cigarette maker ITC edged higher on defensive buying in weak market, while another index heavyweight Reliance Industries (RIL) reversed intraday gains in late trade. Interest rate sensitive banking and auto stocks declined after data released on Tuesday showed that the consumer price inflation edged up further in February 2013.
Commenting on the market, India Infoline (IIFL)'s Head of Research Amar Ambani said, “With the IIP and the CPI data out of the way, market participants will look forward to the monthly inflation data which is scheduled to be released on Thursday.... The undertone remains cautious and there is no point in taking any risky bets ahead of the RBI policy meet next week.”
From broader markets, the BSE Small-Cap index shed 1.27 per cent to close at 6,237.64 points and the BSE Mid-Cap index lost 1.0 per cent to settle at 6,395.63 points in the day's closing. The market breadth, indicating the overall health of the market, was weak with as many as 1,893 shares on BSE fell and 992 stocks rose, while a total of 128 scrips remained static. The total turnover on BSE amounted to Rs 1,682 crore, which is lower than Rs 2,057 crore on Tuesday last.
Meanwhile during the day abroad, European stocks edged lower tracking losses seen in Asian markets, even as investors questioned whether the rally in global equities has been overdone. Key indices in France, Germany and the UK shed by 0.16 to 0.80 per cent.