Stocks opened on a buoyant note on the Indian bourses today with investors indulging in hectic buying across the board, tracking cues from Asian markets, where the key indices posted strong gains amid easing worries about the eurozone crisis following the European Union agreeing on a relief package to the ailing Spanish banks. Expectations of a rate cut from the central bank later this month triggered some strong buying rate sensitive stocks in the morning session.
After trading firm till well past noon, notwithstanding a few rounds of profit taking now and then, the market faltered in the final hour following a warning from Standard & Poor's that India could lose its investment-grade rating due to slow GDP growth and political roadblocks to economic policymaking.
The mood turned so bearish post release of this news that the market failed to rebound despite a strong display by the European markets.
The BSE benchmark Sensex, which rose nearly 175 points to 16,893.81 after a bright start, ended the day with a loss of 50.86 points or 0.3% at 16,668.01, snapping a six-session winning streak. The barometer touched a low of 16,627.48 in the final hour.
The Nifty index of the National Stock Exchange, which declined to a low of 5040.70, closed at 5054.10, well off the day's high of 5124.45, recording a loss of 14.25 points or 0.26%.
Capital goods, healthcare and realty stocks wilted under pressure and mostly closed weak. Oil, automobile and bank stocks too drifted lower, giving up their earlier gains.
Metal, information technology and power stocks had some good moments in positive territory, but lost their way past mid afternoon and finally ended the day way down from their highs. Power stocks moved higher on hopes of a likely hike in tariff, but gave up most of their gains later on in the session. Select FMCG and consumer durables stocks moved up.
Cipla, BHEL, Larsen & Toubro and Jindal Steel lost 1.9% - 2.3%. Tata Motors, Hero Motocorp, Maruti Suzuki, Dr Reddy's Laboratories, ONGC, Mahindra & Mahindra and Reliance Industries ended lower by 1% - 1.5%. State Bank of India, ICICI Bank, Wipro and Sun Pharmaceutical Industries also closed weak.
HCL Technologies ended lower by nearly 3.5% following an announcement from the company that its vice chairman and CEO Vineet Nayar sold 2.7 million shares, representing 0.39% stake of the company, for Rs 134 crore.
Midcap and smallcap stocks started off on a firm note but drifted lower as the session progressed. The market breadth was slightly positive at close. Out of 2851 stocks traded on BSE, 1447 stocks moved up. 1260 stocks declined and 144 stocks ended flat.