The benchmark Bombay Stock Exchange (Sensex) on Tuesday slipped 159.54 points to 27,425.73 as crude prices sliding towards six-year lows hit sentiment and on profit-booking in shares after a three-day robust rally.
The National Stock Exchange (NSE) Nifty index also dipped 23.60 points, or 0.28 per cent, to end at 8,299.40.
Realty, Consumer Durables, Oil & Gas shares saw heavy selling while FMCG and healthcare stocks saw defensive buying, traders said.
After opening higher, the BSE Sensex hit a high of 27,670.19 on improved industrial production growth but lost all gains to end 159.54 points, or 0.58 per cent, lower at 27,425.73. Intra-day, it had dipped to 27,324.58 points.
In the previous 3 sessions, it had gained 676.45 points.
Among 30-share Sensex, 21 constituents ended with losses and nine others finished higher.
Crude was dealt another blow Tuesday when key OPEC member the United Arab Emirates said the cartel could not stop world prices plunging and called for a cut in US shale oil output.
Brent crude for February delivery fell $ 45.50 a barrel – around its lowest point since April 2009. On Monday, it had plunged more than five percent to end below $ 50.
Reviving hopes of manufacturing recovery, industrial production grew at five-month high of 3.8 per cent in November last year, but retail inflation inched up to 5 per cent in December.
“Rise in IIP cheered the markets. However, further slump in oil prices made the overall mood of the markets grim,” said Bonanza Portfolio, Associate Fund Manager, Hiren Dhakan.
Besides, participants preferred to book profits after recent gains, said Deepak Pahwa, a Delhi-based stock broker.
Bucking the trend, shares of Wipro, M&M, Cipla, Coal India, Dr Reddys, ITC Ltd, Axis Bank, Hindalco and Maruti Suzuki ended higher and cushioned the fall to some extent.
Globally, a mixed closing at Asian markets and a better opening in European markets also influenced trading here.
Sectorwise, BSE Oil & Gas index fell by 1.06 per cent, Realty index (1.85 per cent), Consumer Durables index (1.20 per cent), Power( 0.89 per cent), Capital goods index (0.66 per cent) and Banking index (0.55 per cent) among others.
However, FMCG index rose 0.72 per cent and Healthcare index gained 0.14 per cent.
Meanwhile, foreigners bought shares worth a net Rs 244.95 crore on Monday as per provisional data.