Benchmark indices snapped their four-session winning streak on Tuesday, with the Nifty giving up part of Monday's closing-auction-led gains as investors turned cautious ahead of the Reserve Bank of India's monetary policy announcement.
The BSE Sensex declined 210.08 points, or 0.27%, to settle at 78,428.95, while the NSE Nifty50 fell 159.40 points, or 0.64%, closing at 24,614.90.
The Nifty underperformed the Sensex as the benchmark continued adjusting to the new Closing Auction Session (CAS) mechanism introduced for stocks in the futures and options (F&O) segment.
The weakness followed Monday's sharp late-session rally triggered by the new auction framework. Tuesday's pullback was largely seen as a correction of those gains rather than a sign of weakening market fundamentals.
Most sectoral indices ended in negative territory, with Realty emerging as the worst performer, dropping 2.39%. IT stocks also came under pressure after their recent rally, with the Nifty IT index losing 0.82%. FMCG, Financial Services, Auto and Consumer Durables also closed lower.
Some sectors, however, bucked the trend. Nifty Media gained 2.03%, Metal advanced 0.91% and Financial Services Ex-Bank rose 0.47%. In the broader market, the Nifty Smallcap 100 index added 0.23%, while the Midcap 100 slipped 0.29%. India VIX rose nearly 2%, reflecting higher market volatility.
Among the Sensex stocks, Asian Paints rose 1.31%, Tata Steel gained 1.22%, Kotak Mahindra Bank advanced 1.08%, Trent added 0.97% and Bajaj Finance climbed 0.94%.
On the downside, Hindustan Unilever declined 0.71%, Infosys fell 0.44%, Titan lost 0.31%, Maruti Suzuki slipped 0.19% and TCS edged down 0.08%.
Crude oil prices moved higher during the session, with Brent crude rising 2.46% to $85.83 per barrel, while WTI crude gained 1.83% to $81.81 per barrel, keeping concerns over global energy prices in focus.
Meanwhile, the rupee ended almost unchanged at 95.3775 against the US dollar, as foreign portfolio inflows, importer demand for dollars and caution ahead of the RBI's policy decision offset one another.
Investors are now awaiting the outcome of the RBI's Monetary Policy Committee meeting later this week. The central bank is widely expected to keep interest rates unchanged, while markets will closely watch its commentary on inflation, liquidity and economic growth for clues on the policy outlook in the coming months.
