Markets erased all the morning gains, in spite of firm cues from global peers. Sensex extended losses in late noon trades and touched a low of 18,474 - down 292 from the day's high.
The index finally ended down 151 points at 18,502. Nifty ended at 5,567 - down 46 points. Heavyweights were weak in trades today.
Asian markets rose on an upbeat earnings report and housing data from US. Technology shares ruled the roost. Nikkei and Seoul Composite gained 1% each, while Taiwan jumped iover 2% in trades on Wednesday.
Meanwhile, European shares rose ahead of the meeting of Euro-zoneleaders on Thursday. CAC, DAX and FTSE were all up by nearly 1% each.
Heavyweights - ICICI Bank and Reliance dragged the index down nearly 40 points. Wipro and HDFC Bank were some of the other major draggers.
Wipro shed 4% at Rs 399 after reporting a 2.9% quarter-on-quarter drop in consolidated net profit to Rs 1,335 crore for the first quarter ended June 2011, against Rs 1,375 crore in the previous quarter. The company expects revenues for the second quarter FY12 at $1,436-1,464 million, a growth of 2-4% over the first quarter.
The Reserve Bank of India may hike key lending rates by another 25 bps to tame inflation, feels analysts.
The RBI would be conducting its first quarter review of the monetary policy next Tuesday.
BSE Bankex was down 1.4% at 12,763. Private sector players, including Yes Bank, IDBI Bank, Kotak Mahindra Bank and Axis Bank were down around 1-2% each.
BSE healthcare, power and auto indices were down almost 2%
Rainfall continues to be a concern, after monsoon rains dropped 3% below average in the firs week of July. FMCG is the sole sectoral index in the green.
Heavyweights, ITC and Hindustan Unilever edged up in trades.
"FMCG counters are the defensive lots and tend to outferporm when the overall markets underperform or stagnate. Defensive players may use dips to accumulate the same," said Ranak Merchant, Technical Analyst - Strategies, Sushil Financial Services.
Crompton Greaves slumped for the second straight day - down 15% at Rs 177 on Tuesday, the stock had tumbled 14% on a 58% decline in consolidated net profit for Q1.
Among other stocks, Dr Reddy's dropped 2.3% in spite of a 25% jump in Q1 net. Shares of Lupin dropped 4% after the company disclosed that renowned investor Rakesh Jhunjhunwala has lowered his stake in the company by more than half.
Meanwhile, Finance Minister Pranab Mukherjee said in a statement today, that Inflation is expected to remain sticky and high between August and December.
He said the headline inflation is expected to ease after December and could slow down to 6-7% by March 2012. Moreover, GDP growth is likely to be 8.6% in 2011-12, higher than 8.5% reported in last fiscal, the Finance Ministry said.
Hero Honda, Zee Entertainment, JSW Energy and Kotak Mahindra Bank will be announcing their corporate numbers on Wednesday.
BSE market breadth was negative. Out of 3,022 stocks traded, 1,694 declined while 1,196 advanced.
