Markets retreated from all-time high levels on Thursday, with BSE benchmark Sensex closing over 42 points lower to register the first fall in seven days on profit-booking in banking, refinery and capital goods shares.
In early trade, the bellwether index soared to all-time high of 22,620.65 on initial buying on the back of foreign capital inflows. The is the ninth day in a row the key index is registering a fresh life-time high intra-day.
In choppy trade, it declined to day's low of 22,369.28 before settling at 22,509.07, a loss of 42.42 points or 0.19% from its previous close.
The 50-share NSE Nifty also fell by 16.45 points to finish at 6,736.10 after registering all- time peak of 6,776.75 in early trade.
Rising on the back of steady fund inflows, the Sensex on March 24 closed above 22,000 for the first time ever. The total gain for the Sensex in the previous six days is 496.28 points or 2.25%.
Many had attributed the surge in markets to sustained FII inflows on hopes of a stable government coming to power at the Centre after general elections.
Finance minister P Chidambaram had claimed last week that markets were rallying on account of the UPA government's corrective measures for the economy.
Bank stocks fell on Thursday after the Reserve Bank of India (RBI) on Wednesday clarified that the option for spreading the mark-to- market losses over the three quarters ended on March 31, 2014 and no further extension is allowed, brokers said.
Foreign Institutional Investors (FIIs) bought shares worth a net Rs 594.67 crore on Wednesday, as per the provisional data from the stock exchanges.
"The domestic bourses traded in the red as investors opted to book profit after recent advances. However, recovery in later half significantly pared losses as a result the benchmarks managed to close slightly on the negative note," said Jayant Manglik, president, Retail Distribution, Religare Securities.
Of 30 Sensex stocks, 17 ended lower, while 13 finished higher.
State-run power equipment maker BHEL suffered a loss 3.20%, the biggest among Sensex scrips. Gail India was down 2.23%. Another public sector company Coal India too lost 2.21%.
SBI ended 1.97% lower, Axis Bank 1.96%.
Bharti Airtel, Tata Steel and ONGC all lost over 1% each.
HUL rose by 1.89%, followed by Cipla at 1.65%. Dr Reddy's Lab gained 1.50%, HDFC 0.70%.
Among the S&P BSE sectoral indices bankex fell by 1.09%, followed by Oil&Gas 0.87%, CG 0.83%, Realty 0.44% and Power 0.44%. Healthcare was firmed up by 0.95% and FMCG 0.44%.
The market breadth turned negative as 1,511 stocks finished in the red, 1,277 stocks ended in the green and 131 ruled steady. The total turnover dropped to Rs 2,967.41 crore from Rs 3,290.90 crore on Wednesday.
Asian stocks showed a mixed trend even after data showed US companies added workers and China outlined economic stimulus plans. Key benchmark indices in Hongkong, Japan and Singapore moved up by 0.18-0.85%, while indices in China, South Korea and Taiwan eased by 0.18-0.74%.
European markets were trading lower in their early trade before European Central Bank's (ECB) rate decision. Key indices in France, Germany and UK declined by 0.03-0.12%.