The BSE Sensex ended on a flat note today, down marginally by 15 points at 16,451.47 as it snapped out of 3-session gains on profit booking and weak overseas markets despite heavyweight RIL shooting up nearly 5 per cent.
Selling pressure was strong in metals, IT, capital goods, PSUs and power sector stocks.
RIL, top heavyweight on the BSE 30-scrip index, surged 4.94 per cent after it said in a filing that its board will meet on Friday "to consider and approve a proposal for buy back of equity shares".
However, IT major TCS lost 2.62 per cent despite having posted sound Q3 results yesterday.
Overall, IT stocks were down on the strengthening rupee that tends to lower the profit margins of software services exporters. IT companies earn about 85 per cent revenues from the US and Europe.
Sensex opened the day higher than yesterday's level and moved between 16,517.96 and 16,384.48. It closed at 16,451.47, down 14.58 points or 0.09 per cent.
The NSE 50-share index Nifty also moved down by 11.50 points or 0.23 per cent to settle at 4,955.80.
Global cues were weak. Key indices in Hong Kong, Taiwan and Japan were up, but those in Singapore, China and South Korea were down. In Europe, markets in the UK, Germany and France were also down in the afternoon trade.
"The mood was somber for the entire market even as index heavyweight Reliance gained. IT stocks witnessed selling pressure from the onset of the session as sentiments got adversely affected by TCS's management cautious comments at the release of Q3 FY'12 results outcome," said Shanu Goel, Research Analyst at Bonanza Portfolio.
"Tomorrow's session will be influenced by result outcome of Bajaj Auto and HDFC Bank," she added.
Stocks More on Reliance
Company INFO More on Reliance
SHARES (PREOPEN): Sensex seen higher; TCS, airlines in focus
Sensex is expected to nudge higher on Wednesday, as markets continue to stay upbeat on positive domestic macroeconomic news and investors are buoyed by good quarterly results from the country's top software services exporter.
Tata Consultancy Services, which heads India's $76 billion IT services industry, met estimates with a 23 percent rise in quarterly profit and allayed fears that the crisis in the euro zone would hit the industry's growth.
The main stock index climbed to its highest close in almost six weeks on Tuesday as investors eyed a potential easing of monetary policy by the central bank on the back of encouraging inflation data and digested better than expected Chinese GDP growth data.
There is more pipeline negative news from the euro zone but domestic cues are now supportive of equity assets, Moses Harding, head of market research at IndusInd Bank, wrote in a note on Wednesday.
Airline shares are seen opening higher after the country's aviation ministry said late on Tuesday it would recommend the government allow foreign airlines to buy stakes of up to 49 percent in struggling carriers.
Jet Airways, Kingfisher Airlines and SpiceJet all gained strongly on Tuesday in anticipation of a decision on the issue.
Essar Oil is expected to open down after India's Supreme Court passed a ruling that its largest shareholder said means the refiner will no longer be able to defer payment of a sales tax, having hitherto benefited from deferrals of $1.24 billion.
Shares in London-listed Essar Energy, which owns 87 percent of Essar Oil, fell as much as 38 percent following the ruling late on Tuesday, before closing 26 percent lower.
Asian shares were mixed on Wednesday after sentiment improved on soothing economic data the day before, as focus returns to Europe with Portugal testing investor confidence in a debt sale and Greece resumes talks on its debt restructuring.
At 0250 GMT, the MSCI's broadest index of Asia Pacific shares outside Japan was down 0.1 percent, while Tokyo's Nikkei average was up 0.2 percent.
The Nifty India stock futures in Singapore was slightly lower.
STOCKS TO WATCH
* State Bank of India is likely to rise after its chairman told Reuters the lender is not looking at raising more funds, a day after the state-run bank received approval for capital infusion of up to $1.6 billion.
* Usha Martin may rise after the steel wire ropes maker said it expects to commence partial operations at its Thailand unit from April. The operations of the Thailand unit, Usha Siam Steel Industries, were affected by floods in the country.
FACTORS TO WATCH
* Euro off highs ahead of Portugal debt sale
* Oil up on economic data, but Europe worry limits rise
* Shares steady, eyes Portugal debt sale, Greece
* Wall St rises but ends off highs as Citi sinks