In an extremely volatile session, Indian benchmark equity indexes closed in the red, see-sawing between losses and gains as investors remained jittery ahead of the Federal Reserve's policy meeting later in the day.
That marks the fourth straight session of losses for the stock markets' key indices.
The 30 stock S&P BSE Sensex closed 152.18 points or 0.29 per cent lower at 52,541.39, compared to its previous day's close of 52,693.57. NSE Nifty closed at 15,692.15, 0.25 per cent lower than Tuesday's 15,741.95 points.
NTPC was the top laggard in the 30-share Sensex pack, declining 2.02 per cent, followed by Infosys, Reliance Industries, Wipro, HUL, Tech Mahindra, PowerGrid and ITC.
On the other hand, Bajaj Finserv, Bajaj Finance, Tata Steel, Larsen & Toubro, SBI, Asian Paints and M&M were among the gainers, climbing as much as 4.24 per cent.
Telecom stocks were largely flat, with the BSE Telecom index dipping 0.17 per cent, after the Union Cabinet approved the auction of 5G airwaves and gave its nod for setting up of captive 5G networks by big tech firms.
Earlier, the Sensex started the day in the negative at 52,650.41 points and fell to a low of 52,538.51 points. The Sensex touched a high of 52,867.73 points. It was trading in a narrow range, slipping into negative multiple times throughout the day.
“Indian markets languished in negative territory for the better part of the trading session and finally extended its losing streak in a trend that was more or less similar in other Asian indices. Currently, risk-off sentiment is prevailing in the market and investors traded with caution ahead of the outcome of the Fed meet and booked profit in select counters," said Shrikant Chouhan, Head of Equity Research for Retail at Kotak Securities.
"Technically, the Nifty has formed a small inside body bearish candle which indicates indecisiveness between the bulls and bears. On intraday charts, the index is holding a lower top formation that indicates further weakness from the current levels,” he added.
During the session, the Sensex and Nifty traded in a narrow range as the gains made due to the rally in the scrips like Bajaj twins, Tata Steel, SBI and ICICI Bank were offset by the losses in the shares of NTPC, HUL, Infosys, Wipro and RIL.
Among individual sectors and shares, the Nifty energy index dropped 1.2 per cent, with Oil and Natural Gas Corp down about 3 per cent while NTPC Ltd shed 2.2 per cent.
"People are exiting their profitable trades and with oil prices already moving up, the energy sector stocks are down today due to profit-booking," Siddharth Khemka, head of retail research, Motilal Oswal, told Reuters.
The Nifty metal index dropped 0.7 per cent, pulled lower by a 3.7 per cent drop in Tata Steel.
Network18 Media and Investments rose 2.4 per cent after Viacom18, in which Network 18 owns a majority stake, won digital streaming rights for the Indian cricket league IPL from 2023 to 2027.
Shares of One97 Communications were up 1.8 per cent after the company's average monthly users on its Paytm super app rose 48 per cent for two months ending May.
All eyes will be on the FOMC June policy meeting outcome with focus on the magnitude of the rate increase," said Prashanth Tapse, Vice President for Research at Mehta Equities.
Global investors remained cautious, eyeing the Fed announcement, with many fearing drastic action would risk tipping the world into recession.
"Equity markets traded nervously ahead of the US Fed meet outcome. While strength was seen in morning, selling pressure in the second half dragged the indices lower. All eyes would be on the US Fed meet outcome," Ajit Mishra, VP for Research at Religare Broking, told PTI.
Surging inflation has led traders to brace for a big move by the Fed - a 75-basis-point increase, which would be the largest US interest rate hike in 28 years.