Benchmark indices closed lower for third straight trading session, amid negative global cues, with metal shares leading the decline tracking a fall in global commodity prices. Further, selling by foreign institutional investors and weakness in the rupee and oil further dampened market sentiment.
Besides, growth in India's services firms fell to a four-month low of 53.7 in April from 54.3 in March on the back of new business growing slower than the previous months, a business survey showed on Wednesday.
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The S&P BSE Sensex plunged 128 points to end at 25,102 and the Nifty50 dipped 40 points to close at 7,707. Broader markets underperformed the benchmark indices- BSE Midcap and Smallcap indices slipped over 1%.
"Markets are impacted by global cues. Any good upcoming results will change the mood of the markets. Markets are consolidating before an upmover and mid-cap shares look interesting," said Jayant Manglik, President-Retail Distribution, Religare Securities.
Among global markets, European stocks hovered near a three-week low on Wednesday, with shares in Dialog Semiconductor and BHP Billiton among the worst performers.
Asian stocks edged lower amid renewed global growth concerns in the wake of weaker-than-expected Chinese manufacturing data. The Caixin China general manufacturing purchasing managers' index fell to 49.4 in April 2016 from 49.7 in March 2016. Hang Seng, Taiwan, Strait Times and Shanghai slipped between 0.1%-1.5%.
Oil prices extended losses in Asia today, with the US benchmark below $44 a barrel owing to a pick-up in the dollar and as Iran ramps up production, while traders await the release of inventories later in the day.
Back home, the rupee weakened 21 paise to 66.63 against the US dollar at the Interbank Foreign Exchange market on increased demand for the American currency from importers and banks.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 755.28 crore yesterday as per provisional data released by the stock exchanges.
Adani Ports and Special Economic Zone (SEZ) slumped 12%, its sharpest fall since August 24, 2015 after the company reported lower than expected EBITDA margin for the quarter ended March 2016.
Tata Motors fell around 6% after Jaguar Land Rover (JLR), the company's British luxury car unit, recorded decline in US sales during the month of April 2016.
Shares of metal and mining companies fell upto 6% amid renewed global growth concerns in the wake of weaker-than-expected Chinese manufacturing data.
SAIL, Hindalco, NALCO, Tata Steel, Vedanta, Hindustan Zinc and JSW Steel melted between 2%-6%.
On the gaining side, HDFC gained 3% after the housing finance major reported net profit of Rs 2,607 crore for the quarter ended March (Q4FY16), up 40 per cent year-on-year (y-o-y), which was way ahead of Bloomberg consensus estimate of Rs 2,303 crore.
NTPC rose over 1% after the company announced that the 200 megawatts out of 250 megawatts of stage-I Ananthapuramu Ultra Mega Solar Power Project has been synchronized on April 30, 2016.
Among other shares, Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) surged 3%, extending its past one-week rally on the BSE in an otherwise weak market after reporting strong set of numbers for the quarter ended March 2016.
BASF India increased 4% after the company reported a net profit at Rs 77 crore for the fourth quarter ended March 2016 (Q4), on back of strong operational performance and one-time gain due to profit on sale of its non-core assets.