Benchmark indices dropped in trade, following a weakish trend across the global markets ahead of a 2-day US Fed meet.
There was profit taking, after the stupendous rally of the past 2-weeks, in which the Sensex has gained almost 2000 points, since hitting Budget day lows.
The Sensex ended the day lower by 253 points, while the Nifty dropped 78 points in trade. Leading the set of losers in trade were heavyweight HDFC and ITC.
Banking stocks saw some traction on hopes that the Reserve Bank of India would cut interest rates. Weakish inflation data released on Tuesday pushed banking stocks higher with Punjab National Bank, State Bank of India and Bank of Baroda among the gainers in trade. There are hopes that the RBI may cut interest rates ahead of the Monetary policy.
Tata Steel and Bharti Airtel were among the few gainers in trade from the Nifty. Oil marketing company stocks saw buying support after a leading brokerage firm upgraded the stocks.
IDBI Bank on the other hand gained ground after reports that the ED did not find any money laundering charges against the bank.
Meanwhile, the rupee was trading marginally weak at 67.23 to the US dollar.