The BSE Sensex fell for the second consecutive session tracking weak global markets and amid profit taking. The Nifty, however, managed to close above the 5,900 mark and the rupee traded higher against the dollar at 54.32 as of 3.40 p.m.
The Sensex closed 81 points or 0.41 per cent lower at 19,565, while the Nifty ended 28 points down at 5,914 on Tuesday.
India's factory output grew 2.4 per cent in January from a year earlier, nearly double the 1.2 per cent forecast by analysts. The positive data was, however, eclipsed by accelerating consumer inflation, which pared some of the rate cut hopes for the RBI's policy review on March 19. The Consumer Price Inflation rose to 10.91 per cent from 10.79 per cent in January.
Some analysts like Abhishek Agarwal of Fortune Interfinance turned bearish in their outlook, citing domestic macro headwinds. Others like Parag Doctor of Keynote Capitals said markets are taking a pause after the sharp rally and unless 5850 breaks on the Nifty the outlook will not turn bearish. The Sensex had gained over 4 per cent, while the Nifty rose over 200 points in the last week.
FMCG and auto stocks managed to close in the green, but all other groups of shares ended with deep cuts. Consumer durables fell 2 per cent, while realty and power stocks declined over 1 per cent.
Only 12 stocks closed higher on the Nifty, led by drug maker Ranbaxy, which closed 2.5 per cent higher. Global brokerage Nomura had upgraded Ranbaxy to buy on Monday.
Cement stocks -- Ambuja and ACC, FMCG major HUL and Tata Motors gained 1-1.6 per cent.
Energy major Cairn India was the top Nifty loser, down over 3 per cent. Tata Power also closed 3 per cent lower after a downgrade by global investment bank Credit Suisse.
State-run BHEL, mobile carrier Bharti Airtel and engineering major Siemens India ended 2-3 per cent lower.
