After four days of gains, markets succumbed to profit-booking today, with benchmark Sensex slipping 93 points to finish at 26,559, pressured by sustained foreign capital outflows amid mixed macro indicators.
Sentiment soured after November manufacturing PMI decelerated sharply as cash crunch slowed domestic consumption, production of goods and new orders.
The Sensex resumed higher at 26,756.66 and firmed up to 26,769.32 on initial buying. However, it later fell to 26,540.82 before ending at 26,559.92, showing a loss of 92.89 points or 0.35 per cent.
The Sensex had gained 792.64 points, or 3.07 per cent, in previous four sessions.
The 50-share Nifty index fell 31.60 points, or 0.38 per cent, to 8,192.90 after shuttling between 8,250.80 and 8,185.05.
"After oil's surge prompted a higher opening, traders chose to lock in gains after markets had been on a consistent run since Friday. Data release showing deceleration of PMI in November further depressed recovery expectations," said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.
Bullish US employment data has improved chances of December US rate hike, which could further accelerate FII exodus, he added.
The market was initially buoyed by strong GDP numbers, released after trading hours yesterday, showing Indian economy accelerating 7.3 per cent in the September quarter.
However, the momentum was broken after the Nikkei India Services Purchasing Managers' Index (PMI) -- a gauge of manufacturing performance -- fell to 52.3 in November, down from a 22-month high of 54.4 in October.
Metal, power, utilities, banking, realty and telecom counters were the major losers today, while healthcare and FMCG shares gained.
Meanwhile, foreign portfolio investors continued their selling spree and sold shares worth a net Rs 434.42 crore yesterday, as per provisional data released by the stock exchanges.
A firming trend was seen at other Asian markets following an OPEC deal to cut oil output for the first time in eight years, which sent crude prices soaring almost 10 per cent.
Globally, US oil prices climbed USD 4.21 to USD 49.44 a barrel in yesterday's trade.
Key indices such as Japan's Nikkei gained 1.12 per cent, while Shanghai Composite Index rose 0.43 per cent and Hong Kong's Hang Seng spurted 0.39 per cent.
European shares rose as well, with Paris CAC 30 rising 0.59 per cent, Frankfurt's DAX up 0.19 per cent but London's FTSE was slightly lower in early deals.
A total of 15 stocks in the 30-share Sensex pack ended
lower, while remaining 15 closed higher.
Major losers were Power Grid (3.96 per cent), Asian Paints (3.18 per cent), Tata Motors (2.44 per cent), M&M (2.44 per cent), ICICI Bank (2.13 per cent), Bharti Airtel (1.66 per cent), Tata Steel (1.27 per cent), SBI (1.03 per cent) and NTPC (0.95 per cent).
However, Gail rose by 2.87 per cent, followed by Sun Pharma (1.62 per cent), Hero Motocorp (1.45 per cent), Dr Reddy's (1.29 per cent), ONGC (1.11 per cent), HDFC (0.71 per cent) and Lupin (0.67 per cent).
Among the S&P sectoral indices, Metal fell 1.69 per cent, Power 1.57 per cent, Utilities 1.34 per cent, Bankex 1.16 per cent, Realty 1.11 per cent, Telecom 1.02 per cent, Auto 0.88 per cent and Finance 0.83 per cent.
Healthcare and FMCG rose 0.34 per cent and 0.18 per cent, respectively.
Market breadth turned negative as 1,562 stocks ended lower, 1,118 finished higher while 136 ruled steady.
The BSE Mid-Cap index provisionally fell 1.15 per cent, while the small-cap index declined 0.64 per cent.
The total turnover on BSE amounted to Rs 2,776.34 crore, higher than Rs 2,590.67 crore registered yesterday.