The Sensex on Tuesday retreated from one-month high levels to 19,463.82, down 113.57 points, as overseas investors booked profits in bluechips including Infosys, RIL and HDFC Bank after three straight days of gains.
Signs of fresh offloading of positions by foreign funds, weak trading in European markets and some fag-end depreciation in rupee also affected investor sentiment, said traders.
Shares from realty, PSU and refinery segments were at the receiving end while consumer durable and pharma counters attracted good buying support.
The Bombay Stock Exchange 30-share gauge remained in negative for the most of the day before settling down by 113.57 points or 0.58% at 19,463.82. In last three-day, S&P BSE Sensex had spurted by 1,025.18 points or 5.53%.
The wide-based 50-issue CNX Nifty of the NSE dropped by 41.30 points, or 0.70%, to end at 5,857.55. SX40 index, the flagship index of MCX-SX, also ended 54.34 points, or 0.47% lower at 11,566.47.
Fall in heavyweights like Infosys, RIL, HDFC Bank, HDFC, L&T, ONGC, SBI, Tata Motors, Jindal Steel and Maruti mainly put pressure on Sensex. Auto stocks were weak after posting tepid monthly sales numbers. Infosys was under seller's radar on fears the IT major will scale down FY14 sales outlook.
Banking shares also saw some selling amid 26 private and pubic sector entities having applied to RBI for grant of bank licences, heightening chances of competitive intensity.
Kishor P Ostwal, CMD, CNI Research Ltd. said: "Market was rising more on short covering than buying...some cooling off has taken place. As regards bank licences, I think the story will taper of in days to come as NBFC are trailing at high valuations compared to existing banks." The rupee was trading weak at 59.64 levels compared to yesterday's closing of 59.52 a dollar.
Globally, Asian stocks endex mixed while European markets were trading lower in their early trade as investors awaited reports on UK construction activity and US factory orders.
Asian stocks endex mixed as anaemic manufacturing data from China raised growth fears. Key benchmark indices in Hong Kong, South Korea and Taiwan closed with small losses while from China, Japan and Singapore finished higher.
In Europe, France's CAC was down by 0.75%, Germany's DAX by 1.22% and the UK's FTSE by 0.62%. Investors were cautious ahead of ECB's July 4 interest rate meeting.
Turning to the local market, 18 scrips out of 30-share Sensex pack ended lower while 12 others finished higher.
Major losers from the Sensex were Jindal Steel (4.21%), Hero Motocorp (2.26%), Tata Power (1.87%), ONGC (1.83%), Infosys (1.72%), Maruti Suzuki (1.62%), HDFC Bank (1.44%), Coal India (1.43%), L&T (1.38%), NTPC (1.32%), RIL (1.30%), HDFC (1.27%), SBI (1.23%) and Tata Motors (1.1%).
However, BHEL rose by 2.74%, followed by Gail India (2.66%), Bharti Airtel (2.51%) and Sterlite Ind (1.60%).
Mahindra Satyam and Tech Mahindra were under pressure today. Amar Ambani, Head of Research at IIFL, said: "We remain positive on the combine considering the improving prospects and attractive valuation." Among the sectoral indices S&P BSE-Realty dropped by 1.78%, followed by S&P BSE-PSU (1.05%) and S&P BSE-Oil&Gas (1.01%).
Total market breadth turned negative as 1,213 stocks ended down while 1,131 stocks closed with gains. 148 stocks ruled steady. Total market turnover rose to Rs 1,794.68 crore from Rs 1,719.26 crore on Monday.