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The Sensex and Nifty reversed early gains and closed at their lowest in two weeks as investors booked profits a day before US Federal Reserve Chair Janet Yellen's speech that is expected to provide clues on outlook for US interest rates.
Thursday's trading session was volatile on account of monthly derivative contracts expiry.
Firming up as much as 0.38 per cent earlier in the day, the broader NSE index slipped in the latter half to close down 58.1 points or 0.67 per cent at 8,592.20, recording its biggest loss since August 10.
The BSE index fell 224.03 points or 0.8 per cent to 27,835.91, posting its biggest fall in two weeks.
The keynote speech at the global central bankers conference in Jackson Hole has traditionally been an event that Fed chiefs used to signal the direction of monetary policy. The US central bank is currently seen as divided as to whether to raise interest rates at least once in 2016.
Gains were also capped on caution ahead of the expiry of derivatives contracts on Thursday.
Barring FMCG and oil & gas, all other BSE sectoral indices ended in the negative zone. Among them, metal index fell the most by 1.43 per cent, TECk 1.36 per cent, IT 1.28 per cent and infrastructure 1.03 per cent. On the other hand, FMCG index was up 0.31 per cent and oil & gas 0.29 per cent.
Among BSE sectoral indices, metal index fell the most by 1.6 per cent, IT 1.27 per cent, TECk 1.26 per cent and infrastructure 1.00 per cent. On the other hand, oil & gas index was up 0.24 per cent and FMCG 0.18 per cent.
Top five Sensex gainers were GAIL (+2.04%), ITC (+1.24%), Axis Bank (+0.47%), Dr Reddy's (+0.34%), and Power Grid (+0.3%), while the major losers were Adani Ports (-3.02%), Wipro (-2.84%), Tata Steel (-2.04%), Infosys (-1.99%) and HDFC (-1.93%).
“Because of a good rollover, we expect the close to be negative. Investors usually book profits ahead of big events, so a likelihood of that happening is higher today and tomorrow", said AK Prabhakar, head of research at IDBI Capital.
European stocks saw their biggest fall in three weeks on Thursday and currency markets were noticeably subdued as investors took to sidelines ahead of one of the big global central bankers gatherings of the year.
Japanese and Chinese stocks had suffered modest drops in Asia and the pace picked up in Europe as London’s FTSE sank 0.8 per cent and Frankfurt and Paris lost 1.2 per cent.
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