Markets pare early gains on profit booking

Mumbai: Benchmark BSE Sensex reversed its early gains to close lower by 304 points on Wednesday due to profit-taking in banking, financials and select IT stocks after a recent surge. The 30-share BSE barometer opened higher and rose further to 58,416.56 in line with gains in Asian shares. However, profit-taking by investors in recent winners and lackadaisical buying at higher levels dragged down the index which tanked over 420 points to hit the day's low of 57,568.59 points in the second half.

The BSE Sensex finally closed lower by 304.48 points or 0.53 per cent to settle at 57,684.82. During the day, it tanked 420.71 points or 0.72 per cent to 57,568.59. The broader NSE Nifty dipped 69.85 points or 0.4 per cent to finish at 17,245.65 with 29 of its stocks ending in red.

"Domestic equity market is stuck in a range for the last couple of days amid increasing volatility. Despite opening in the green, follow up buying was missing at higher levels. This led to downward pressure in the second half of the day," said Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services Ltd.

"After the recent rally, market is getting cautious. Volatility is back due to inflationary pressures triggered by supply constraints. While consistently rising input cost & fall in demand due to surge in Covid cases in parts of the world, war & high commodity prices are impacting earnings growth which can lead to downgrade in outlook," said Vinod Nair, head (research) at Geojit Financial Services.