- Market indices were rising for past three sessions
- US Federal Reserve raised interest rates
- BSE IT (infotech) index was down by 1.35 per cent
Among sectoral indices, BSE teck index declined by over 1.32 per cent, BSE IT (infotech) index was down by 1.40 per cent and BSE capital goods index fell by 0.81 per cent. Pharma stocks bucked the trend as the NSE's Nifty pharma index rose by 1.83 per cent.
Top gainers of Sensex included SunPharma (2.57 percent), Dr Reddy (0.73 percent), Yes Bank (1.17 percent), while the top laggards included ICICI Bank (2.11 percent), TCS (1.75 percent) and SBI (1.72 percent).
The top laggards of Nifty50 included Tech Mahindra (2.16 percent), TCS (2.15 percent) and AdaniPorts (2.15 percent).
"People are a bit nervous because of the Fed's hawkish tone and since the Fed may increase the pace of tightening. Moreover, there is an overhang from the European Central Bank (ECB) policy as all these central banks are on the reverse course now," said Saurabh Jain, AVP, research, SMC Global Securities.
The ECB at its meeting on Thursday will debate whether to end a massive bond purchase scheme later this year, taking its biggest step yet in dismantling crisis-era stimulus credited with reviving growth after a double-dip recession.
The Nifty IT index fell as much as 1.5 percent and was on track to end a six-session winning streak. Infosys Ltd lost 2.6 percent.
Lenders also fell, with the State Bank of India retreating 1.74 percent. The Nifty PSU bank index lost as much as 1.9 percent, after gaining in the last six sessions.
ICICI Prudential Life Insurance Co Ltd dropped as much as 2.9 percent after ICICI Bank Ltd said it would sell a 2 percent stake in the insurer.
Oberoi Realty Ltd dropped as much as 3.6 percent after the real estate developer said it would offer shares to institutional investors.
Meanwhile, shares of Ruchi Soya Industries Ltd, which has been undergoing an insolvency resolution process since December, climbed 4.7 percent to hit their upper price limit before closing at 4.95 percent higher at Rs 13.37, after the edible oil producer said its committee of lenders declared Adani Wilmar Ltd as top bidder for the company.
(With Reuters inputs)