Equity benchmark Sensex declined by 81 points on Wednesday due to losses in HDFC Bank, ICICI Bank and HUL amid a weak trend in global markets.
The 30-share index ended 80.63 points or 0.13 per cent lower at 60,352.82. Similarly, Nifty fell 27.05 points or 0.15 per cent to 18,017.20.
IndusInd Bank was the top loser in the Sensex pack, shedding over 3 per cent, followed by Tata Steel, HUL, Asian Paints, Titan and SBI.
On the other hand, Bharti Airtel, M&M, Sun Pharma, Reliance Industries and ITC were among the gainers.
"Broadly, domestic market continued to trade negative after disappointing opening as inflation worries affected the global markets, said Vinod Nair, Head of Research at Geojit Financial Services.
However, he said the market trend was mixed on stock-to-stock basis.
China's CPI rose 1.5 per cent YoY, while the producer price index rose by 13.5 per cent YoY owing to imported inflation and domestic supply shortages, Nair noted, adding that global investors are awaiting the release of the US inflation data due later today, which is expected to continue at peak levels.
Elsewhere in Asia, bourses in Shanghai, Tokyo and Seoul ended with losses, while Hong Kong was positive. Major indices in Europe were largely trading with gains in mid-session deals.
Meanwhile, international oil benchmark Brent crude was flat at USD 84.78 per barrel.
Rupee Slumps 32 Paise To Close At 74.37 Against US Dollar
The rupee tumbled by 32 paise to end at 74.37 against the US currency on Wednesday, weighed down by a muted trend in domestic equities and strength of the American currency in the overseas market.
At the interbank foreign exchange market, the local currency opened at 74.11 and witnessed a high of 74.06 and a low of 74.42 against the US dollar in the day trade.
The local unit finally settled at 74.37 a dollar, down 32 paise over its previous close. On Tuesday, the rupee had settled at 74.05 against the US dollar.
According to Emkay Global Financial Services, "Inflationary concerns are increasing globally and as we proceed with the week, the IPO related inflows may dry out, keeping USD/INR spot afloat".
The key catalyst for the forex market is the US inflation data. A lower-than-expected CPI figure will reflect a 'transitory' factors, however, a higher-than-expected data or a figure in line with market consensus will induce the Fed to accelerate the pace of asset purchases, it said, adding that "we expect USD/INR spot to trade in between 73.75-74.50".
Gold Gains Rs 137; Silver Declines Rs 160
Gold price in the national capital on Wednesday gained Rs 137 to Rs 47,311 per 10 grams amid rupee depreciation, according to HDFC Securities.
In the previous trade, the precious metal had settled at Rs 47,174 per 10 grams.
Silver, however, declined by Rs 160 to Rs 63,482 per kilogram from Rs 63,642 per kilogram in the previous trade.
Rupee dipped 32 paise to close at 74.37 against US dollar on Wednesday.
In the international market, gold was trading lower at USD 1,827 per ounce and silver was flat at USD 24.30 per ounce.
"Gold prices traded weak with spot gold prices at COMEX trading marginally down at USD 1,827 per ounce on Wednesday. Gold prices traded under pressure with firm dollar and rise in US bond yields," HDFC Securities Senior Analyst (Commodities) Tapan Patel said.