The Indian equity benchmarks erased intraday gains to close on a subdued note on the back of selling pressure in Reliance Industries a day ahead of its earnings. Weakness in HDFC Bank, IndusInd Bank, Sun Pharma and Ultratech Cement also added to weakness in the markets. Investors turned to profit booking in intraday deals as they turned cautious amid rising inflation and global central banks turning hawkish and raising interest rates, analysts said. The Sensex fell as much as 953 points from day's highest level and Nifty 50 index fell below its important psychological level of 17,700 at the day's lowest level.
The Sensex rose 33 points to close at 55,702 and Nifty 50 index advanced 5 points to close at 16,682.
After Reserve Bank of India's surprise rate hike and cash reserve ratio hike, the US Federal Reserve intensified its fight against the worst inflation in 40 years by raising its benchmark short-term interest rate by a half-percentage point Wednesday — its most aggressive move since 2000 — and signaling further large rate hikes to come.
Ten of 15 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty Realty index's 1.6 per cent decline. Nifty PSU Bank, Pharma, Healthcare, FMCG and Bank indices also ended lower.
On the other hand, IT, metal, auto and select financial services shares witnessed buying interest.
Mid- and small-cap shares ended on a mixed note with Nifty Midcap 100 index advancing 0.1 per cent and Nifty Smallcap 100 index declining 0.75 per cent.
IndusInd Bank was top Nifty loser, the stock fell 4.12 per cent to close at Rs 938. Britannia Industries, Sun Pharma, Tata Consumer Products, Nestle India, Ultratech Cement, Eicher Motors, Reliance Industries, Apollo Hospitals, Power Grid, Bajaj Finserv and Cipla also fell between 1.5-3.35 per cent.
On the flipside, Tech Mahindra, Hero MotoCorp, Infosys, HCL Technologies, Tata Steel, Wipro, ONGC, SBI Life and Kotak Mahindra Bank were among the gainers.
The overall market breadth was negative as 1,814 shares ended lower while 1,529 closed higher on the BSE.