Market update: BSE Sensex falls 34 points in volatile trade ahead of State polls

The benchmark Bombay Stock Exchange (BSE) index Sensex on Tuesday fell over 34 points to end at 26,349.33 on caution ahead of key state polls, even as inflation plunged to a 5-year low and Reliance Industries (RIL) posted better-than-expected earnings.

The 30-share BSE barometer on Tuesday opened in positive terrain at 26,537.42. It improved further to touch an intra-day high of 26,550.79 tracking robust earnings by RIL and easing retail inflation, data for which was released on Monday after trading hours.

The broader 50-issue National Stock Exchange (NSE) Nifty settled 20.25 points (or 0.26 per cent) lower at 7,864.00, after shuttling between 7,928 and 7,825.45 on alternate bouts of buying and selling.

Selling in realty, consumer durables, IT, oil & gas, auto, teck, FMCG and capital goods, dragged down the Sensex into negative zone.

Around noon, data showed wholesale inflation in September dropped to a near five-year low of 2.38 per cent. The BSE Sensex finally settled 34.74 points (or 0.13 per cent) lower at 26,349.33. During the day, the gauge had dipped to 26,212.01.

"It was a volatile and range-bound session ahead of the Assembly elections in Maharashtra and Haryana. While markets are closed tomorrow on the account of the Assembly elections in Maharashtra, exit polls after the voting could lead to volatile trading on Thursday," said a note from HBJ Capital.

Maharashtra and Haryana together account for 19 and 5 seats respectively in the Rajya Sabha, so a good performance by the Bharatiya Janata Party (BJP) in these state elections will consolidate the party's post in the upper house, brokers said.

Shares of DLF tanked nearly 28 per cent - in one of its worst falls - after capital market regulator Securities and Exchange Board of India (Sebi) imposed a three-year ban on the company and some top executives from markets.

Overall, 14 of the 30 Sensex scrips declined led by HDFC, HDFC Bank, ONGC, Tata Motors, Tata Steel, TCS and Wipro while 16 led by BHEL, Axis Bank, SBI, Bajaj Auto and HUL rose.

Sectorwise, the BSE Realty index suffered the most by losing 9.24 per cent, followed by IT (down 0.77 per cent), Consumer Durables (0.63 per cent), Oil & Gas (0.54 per cent) and Auto (0.43 per cent). On the other hand, Power, Banking, PSU, Metal and Healthcare ended higher.

Globally, Asian markets retreated and European stocks slumped to eight-month low on economic woes.

Meanwhile, the provisional data released by the domestic bourses showed that Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 671.06 crore on Monday.

The rupee also depreciated against the US dollar to 61.41 intra-day from its previous close of 61.10 on Monday.