The BSE Sensex closed 169 points down on Wednesday due to profit-booking amid the Reserve Bank of India
(RBI) saying "inflation was still high", fading hopes of a rate cut.
Brokers said RBI saying there was
no room for fiscal or monetary stimulus to boost growth in slowing economy mainly halted the ongoing rally. Besides, profit-booking by speculators as well as funds after the benchmark crossed 20,000-mark in Tuesday's trade also affected the day's trade.
"When growth is slowing down you can stimulate the economy either by monetary easing or by fiscal stimulus, but both monetary and fiscal side have no room for stimulus. So that is the big concern," RBI Governor D Subbarao said while addressing IIM students last evening in Lucknow.
The central bank meets on January 29 to review its monetary policy.
The 30-share index of the Bombay Stock Exchange (BSE) fell by 169.19 points, or 0.85 per cent to settle at 19,817.63. The gauge
had crossed the 20,000-mark after two years in Tuesday's trade. The index had rallied almost 324 points in last three sessions.
The broad-based National Stock Exchange index Nifty today ended 54.75 points, 0.90 per cent, lower at 6,001.85, after touching the day's low of 5,992.05.
Besides, a weakening trend in the Asian region and a lower opening in European markets also triggered selling by funds.
While auto, metal, banking, realty, capital goods and IT sector indices remained in the negative zone, an upsurge in oil and gas sector as
stocks of Reliance Industries gained 1.58 per cent ahead of quarterly earnings on Friday cushioned the market to some extent.
The Auto sector index suffered the most by losing 2.40 per cent to 11,335.09 as
shares of Maruti Suzuki fell by 3.30 per cent, Tata Motors by 3.24 per cent, Mahindra & Mahindra by 2.95 per cent and
Bajaj Auto by 1.87 per cent largely on disappointing sale numbers in December.
The banking index fell 1.66 per cent to 14,514.96 as all the 14 constituent stocks, closing lower with losses up to 3.06 per cent.
Shares of software services exporters which had been in the limelight in the past few sessions on the back of stronger-than-expected earnings succumbed to profit-booking.
IT giant Infosys lost 0.68 per cent to Rs 2,771.05, while Wipro fell by 0.02 per cent to Rs 420.05.
Overall, 24 stocks declined while six gained in 30-share Sensex.
With PTI inputs
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