Bears gained ground in the last hour of trade and brought the indices' 10-day winning streak to a halt on Wednesday as heavyweight stocks such as Reliance Industries, Infosys, ITC, TCS, and HUL witnessed sharp profit booking. On the economic front, growth in India's dominant services industry continued to lose momentum in December as a resurgence in coronavirus infections weighed on new business and employment. The Nikkei/IHS Markit Services Purchasing Managers' Index fell to 52.3 in December from November's 53.7. Besides, the composite PMI fell to a three-month low of 54.9.
Globally, prospects of Democrats winning both seats in a US Senate run-off election in Georgia, paving way for President-elect Joe Biden to push through greater corporate regulation and higher taxes in the States, worried investors. Nasdaq 100 Futures tumbled over 200 points or nearly 2 per cent at 4 pm indicating a sombre start on Wall Street later today.
Meanwhile, rising coronavirus cases in Asia further hit sentiment. Chinese authorities on Wednesday imposed travel restrictions and banned gatherings in and around Beijing to stave off another coronavirus wave. On the other hand, local media reports have suggested that the Japan government is set to declare a month-long emergency, till February 7, in Tokyo and surrounding areas amid record cases of Covid-19.
Back home, the benchmark S&P BSE Sensex tanked 264 points, or 0.54 per cent, to settle the day at 48,174 levels. In the intra-day session, the index slumped 750 points from a fresh record high of 48,616 levels to hit a low of 47,864. ITC and Reliance Industries skid 3 per cent each on the BSE, ending the day as top drags. Other large-caps, down up to 2 per cent, were Bajaj Finance, Axis Bank, HCL Tech, and TCS.
On the upside, Powergrid surged 4 per cent and closed as the top gainer on the Sensex.
The NSE's Nifty50, meanwhile, slipped below the 14,150-mark and ended the session at 14,133, down 66 points or 0.47 per cent. From the new peak of 14,244, the index dropped 200 points to hit a low of 14,040.
Nifty IT and Nifty FMCG indices were the top sectoral losers on the NSE, down over 1 per cent each. On the contrary, the Nifty Metal index managed to close 1 per cent higher.
In the broader market, the S&P BSE MidCap index ended the day in the green, up 0.4 per cent at 18,749 level. However, the S&P BSE SmallCap index closed at 18,614 level, down 0.14 per cent.
European stocks edged higher on Wednesday, led by economically sensitive sectors such as banks and energy. The pan-European STOXX 600 index was up 0.2 per cent, while the UK's FTSE 100 rose 0.7 per cent, and Germany's DAX gained 0.2 per cent.
Asian stocks, however, ended lower. Japan's Nikkei ended 0.4 per cent lower, South Korea's Kospi lost 0.75 per cent, and Australia's S&P/200 index declined 1.1 per cent.