Mumbai: The benchmark BSE Sensex Thursday fell by 155 points to 27,735.02 as government's clarification on taxation policies failed to soothe nerves of investors, leading to profit taking in blue-chip stocks such as SBI.
Muted earning numbers, forecast of a below-normal monsoon and fading hopes of a rate cut by the Reserve Bank weighed on sentiments.
Moreover, participants decided to play safe ahead of Q4 result by IT bellwether Infosys tomorrow.
Earlier in the day, Minister of State for Finance, Jayant Sinha said that "clarificatory amendments to MAT rules are under consideration of the government".
"FII's concerns still remains as they continued to be net sellers even after the government's clarification," said Vinod Nair, Head-Fundamental Research at Geojit BNP Paribas Financial Services.
The 30-share Sensex resumed higher at 27,977.27 and shot up to regain the 28,000-mark in early trade on the back of firming global cues.
However, the index failed to hold onto initial gains due to intense selling pressure in the last 90 minutes and slumped to 27,621.18 before ending at 27,735.02, a fall of 155.11 points or 0.56 percent.
"Though we saw an initial uptick in the benchmark, but lack of sustainability at higher levels, triggered profit taking across the board. In absence of any major cues, stocks were also traded subdued and hovered in both directions," said Jayant Manglik, President-retail distribution at Religare Securities.
This is Sensex's sixth fall in last seven sessions.
The gauge had gained 214.19 points in yesterday's trade after Finance Minister Arun Jaitley said GST bill will be passed in the current session of Parliament.
Also, the NSE Nifty ended 31.40 points or 0.37 percent down at 8,398.30 after hitting the day's high of 8,504.95 and a low of 8,361.85 during the session.
On the Sensex, Sun Pharma suffered the most by falling 2.55 percent to Rs 942.45.
Other losers included, SBI, Tata Motors, NTPC, M&M, ONGC, Dr Reddy's, L&T, Infosys, Wipro and RIL.
On 30-share index, as many as 19 scrips ended lower.
Contrary to the market sentiment, shares of metal and consumer durable segments were in the limelight. Tata Steel was the top gainer with a rise of 5 percent after a report from Bank of America Merrill Lynch (BofA-ML) rated Tata Steel, SAIL as 'buys'.
Meanwhile, Foreign Portfolio Investors (FPIs) sold shares worth Rs 910.15 crore, while Domestic Institutional Investors (DIIs) bought shares worth Rs 217.98 crore yesterday, as per provisional data.
Jignesh Chaudhary, Head of Research at Veracity Broking Services said: "The market continue to trade with a negative bias. In the first session indices traded positive, however, as the day progressed, the market collapsed due to sudden fall in blue-chips."
Among Asian markets, barring Hong Kong, which closed with losses, other indices finished in the green between 0.19 percent and 1.92 percent.
European stocks were trading weak in their late morning deals on concerns over the Greece and slowdown in key euro zone data. The France's CAC was down by 0.69 percent, Germany's DAX 0.90 percent, while the UK's FTSE was up by 0.13 percent.
In New York market, the US stocks closed higher yesterday as better-than-expected earnings and an upbeat report on existing-homes sales fuelled investor confidence.
On the Sensex, major losers were Sun Pharma (2.55 percent), SBI (2.41 percent), Tata Motors (2.24 percent), NTPC (2.10 percent), Wipro (1.76 percent), M&M (1.51 percent), Dr Reddy's Lab (1.38 percent), Larsen (1.14 percent) and Hero MotoCorp (0.74 percent).
Sectorally, capital goods fell by 0.89 percent, healthcare 0.86 percent and realty 0.85 percent, while metal rose by 1.56 percent and consumer durables 1.25 percent.
The market breadth remained negative as 1,434 stocks finished with losses, 1,377 stocks rose and 96 ruled steady. The total turnover fell to Rs 2,963.44 crore from Rs 3,512.10 crore, yesterday.
