Mumbai, Aug 2 (IANS) Negative global cues coupled with profit booking subdued the Indian equity markets on Tuesday.
The key indices which opened on a buoyant note succumbed to selling pressure in the late afternoon trade session.
Consequently, the benchmark indices closed the day's trade slightly in the red, as selling pressure was witnessed in metal and healthcare stocks.
However, increased chances of a key economic legislation's passage during parliament's monsoon session, value buying and positive macro-economic data arrested the sharp decline.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged lower by 13.65 points or 0.16 per cent to 8,622.90 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,069.12 points, closed at 27,981.71 points -- down 21.41 points or 0.08 per cent from the previous close at 28,003.12 points.
The Sensex touched a high of 28,175.22 points and a low of 27,943.91 points during the intra-day trade.
The BSE market breadth was skewed in favour of the bears -- with 1,793 declines and 959 advances.
Both the key Indian indices ended on a lower note during the previous trade session on Monday, on the back of profit booking, along with lower crude oil prices and global event risks.
The barometer index had declined down 48.74 points or 0.17 per cent to 28,051.86 points, while the NSE Nifty edged lower by 1.95 points or 0.02 per cent to 8,636.55 points.
Initially on Tuesday, the benchmark indices opened on a higher note despite a negative trend in the Asian markets.
Fresh buying was unleashed, as investors expected the GST (Goods and Services Tax) bill to get passed by the Rajya Sabha when it comes up on Wednesday.
Investors are hopeful about the bill's passage after the Union cabinet last week approved key changes in the proposed legislation.
The amendments in the bill, which is scheduled to be moved by Finance Minister Arun Jaitley in the upper house of parliament, are expected to sail through with the government scrapping the additional levy of one per cent proposed earlier.
Technically called the Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014, it has proposed to delete Clause 18 of the original bill that intended to compensate the manufacturing states with one per cent additional duty for a period of two years or more for revenue losses.
The pan-India tax reform has been passed by the Lok Sabha but is stuck in the Rajya Sabha, where the government lacks a majority.
The upward trend was also supported by a steady rupee and above average monsoon rains.
The rupee strengthened to 66.73-74 against a US dollar from its previous close of 66.74-75 to a greenback.
Besides, positive macro economic data released on Monday, like the Purchasing Managers' Index (PMI) and Eight Core Industries (ECI) output figures aided the equity markets' rise.
However, profit booking, lower crude oil prices and negative global indices dragged the key indices lower.
In addition, caution ahead of major global events risks such as Bank of England's (BoE) monetary policy review and US jobs data subdued investors' sentiments.
"The key indices came off the day's highs due to caution ahead of global event risks and profit booking," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
"However, GST (Goods and Services Tax) bill slated to come up in the Rajya Sabha and bargain hunting supported prices at lower levels."
Dhruv Desai, Director and Chief Operating Officer of Tradebulls, pointed out that CNX Nifty witnessed volatility due to short covering in the second half of the session.
"Auto stocks managed to hold the gains throughout the session, while IT (information technology), sugar and pharma stocks witnessed sideways to bearish sentiments," Desai noted.
"Volatility in USD/INR futures brought volatility in the Indian equity markets."
In terms of investments, the provisional data with exchanges showed that the foreign institutional investors (FIIs) purchased stocks worth Rs 536.27 crore, while the domestic institutional investors (DIIs) divested scrip worth Rs 383.23 crore.
Sector-wise, the S&P BSE metal index plummetted by 170.09 points, followed by the healthcare index, which plunged by 130.31 points, and the automobile index fell by 103.86 points.
In contrast, the S&P BSE fast moving consumer goods (FMCG) index surged by 145.62 points, followed by the IT index, which rose by 6.58 points, and the consumer discretionary goods and services index was up 2.14 points.
Major Sensex gainers during Tuesday's trade were: ITC, up 3.73 per cent at Rs 260.20; Maruti Suzuki, up 2.49 per cent at Rs 4,991; Hero MotoCorp, up 1.26 per cent at Rs 3,260; ONGC, up 1.01 per cent at Rs 221.05; and Power Grid, up 0.79 per cent at Rs 178.65.
Major Sensex losers were: Tata Motors, down 2.80 per cent at Rs 493.85; HDFC, down 2.37 per cent at Rs 1,341.95; Adani Ports, down 1.62 per cent at Rs 224.75; ICICI Bank, down 1.54 per cent at Rs 245.35; and Bharti Airtel, down 1.54 per cent at Rs 358.