NEW DELHI: A decline in private bank and financial stocks weighed heavy on the Sensex on Thursday, which snapped its four-day winning streak.
Its NSE counterpart Nifty met with the same fate too.
Traders turned cautious just ahead of financial quarter results from IT behemoth Tata Consultancy Services (TCS).
Markets were on edge throughout amid tepid cues from Asian and European markets as there was no significant outcome of the three-day trade talks between the US and China in Beijing.
The 30-share pack slipped 106 points, 0.29 per cent, to 36,107, with 17 constituents in the red and 13 in the green. Tata Motors led the Sensex gainers pack, rising 1.34 per cent. It was followed by NTPC, M&M, Bajaj Auto, Infosys and L&T.
IndusInd Bank turned out to be the biggest drag, declining 2.36 per cent, after Citi slashed the target price of the private lender a day after the bank posted its December quarter numbers. Citi has maintained 'Buy' recommendation on the stock, but cut the target price to Rs 1,980 per share. The global financial firm has highlighted a rise in slippages and decline in coverage.
Kotak Mahindra Bank, ONGC, Maruti, Axis Bank and HDFC were among other losers.
Linde India was one of the top gainers on the BSE, rallying over 8 per cent, after promoter BOC India made a delisting proposal for Linde India.
Both midcap and smallcap indices outperformed benchmark Sensex, rallying 0.49 per cent and 0.19 per cent, respectively.
OMC stocks declined up to 2.36 per cent on Thursday after a recent surge in crude oil prices. Crude prices cooled off after a 5 per cent jump overnight.
In the sectoral space, BSE Oil & Gas shed the most by 0.81 per cent with most of the constituents in the red. BSE Bankex, Energy, Finance and Metals too faltered.
What all drove the market today?
1. Mixed signals from US-China talks
China said the three days of talks in Beijing had established a "foundation" to resolve the two country's differences, but gave virtually nothing in the way of details on key issues at stake, according to a Reuters report. This dampened market mood.
2. Global stocks snap New Year rally
The early year rally in world stocks ran out of steam in Europe on Thursday and the dollar dropped to a near three-month low, as mixed signals from US-China trade talks and caution at the Federal Reserve applied the brakes. The pan-European STOXX 600 lost 0.7 per cent as Germany's trade-sensitive DAX dropped 0.8 per cent and Britain's heavyweight FTSE 100 fell 0.5 per cent on persistent Brexit concerns.
3. Rupee loses vigour
The domestic currency fell as crude hovered around the $60 mark and on selling in the rupee by banks and importers. The domestic unit weakened by 18 paise in intraday trade to hit a low of 70.65 against the dollar.
4. Bank stocks melt
Market's expectation of positive Q3 results from banks dimmed after the banks reported higher than expected NPAs, thus leading to a fall in bank stocks and benchmark indices.
Vinod Nair, Head of Research, Geojit Financial Services
"Market had a positive expectation on private banks on Q3 results. This conviction was questioned today… Investors turned cautious ahead of IT sector earnings while a potential settlement in trade dispute helped oil prices re-test $60 in the last couple of days, leading to a depreciation in the rupee."
Jayant Manglik, President, Religare Broking
"Markets remained sideways for yet another session and lost nearly half a percent. Participants preferred to sit on sidelines in absence of fresh trigger and caution ahead of TCS results. Most sectoral indices traded in tandem with the benchmark index and settled marginally lower. Markets will react to the TCS results in early trades on Friday and then anxiety of another IT major, Infosys results would take over. In short, IT pack would lead the market in the next session. We reiterate our cautious view and suggest preferring hedged bets."