The benchmark Sensex on Thursday ended 114 points lower in sustained volatility as stocks beat a hasty retreat after an initial surge, due to late sell-off by operators and Foreign Institutional Investors (FIIs) amid weakness in Asian markets.
Attributing the early rally of 366 points to the rate cut by the US Federal Reserve on Wednesday market players said the 25 basis point cut was already factored in during the last few days and a downward correction was long overdue.
The Bombay Stock Exchange (BSE) barometer fell sharply after rising to the intra-day high of 20,204.21 and ended the day at 19,724.35, down by 113.64 points or 0.57 per cent from yesterday's close of 19,837.99.
The Sensex had risen by 2,624 points or 15 per cent to an all-time trading high of 20,238.16 after Sebi decided late last month to allow registration of proprietary sub-accounts of FIIs and make FIIs registration faster and simpler, setting at rest FIIs' concerns over the PN restrictions.
The broader S&P CNX Nifty of the National Stock Exchange (NSE) crossed the 6,000 level for the first time ever but later fell back to close at 5,866.45 against 5,900.65, a net loss of 34.20 points or 0.58 per cent.
Commenting on the Fed's rate cut, Finance Minister P Chidambaram said it was expected and already factored in by RBI in its quarterly review of monetary policy on October 30.
The Fed's move is expected to increase capital flow in the Indian Stock Market.