After touching a new 17-month high in intra-day, the market on Thursday closed down by marginal 36 points on profit—booking across IT, health-care and consumer durable shares.

Marketmen said rupee rising to 13-month high of 46-levels against the US dollar exerted pressure as investors feared a stronger domestic currency could hurt operating margins of the software exporting companies as well drug makers.

They said the market hit a 17-month high of 17,350.39 on good buying support on the back of overnight strong rally in US stocks where Dow-Jones Industrial average regained 10,000 for the first time in a year on better-than-expected reports from Intel and JP Morgan Chase.

However, the initial gains could be sustained and the Bombay Stock Exchange benchmark Sensex closed the day at 17,195.20, down by 35.91 points from its last close.

Thursday’s fall came after two days of gains which saw barometer rising by 588.45 or 3.54 per cent.

“The markets are trading out of fundamentals and have gone up quite a lot. Today’s drop is a slight pause to the pace at which it was moving up,” SMC Global Vice President Rajesh Jain said.

“Investors should be cautious at this level and not enter the market. With the Dow hitting the 10,000 mark, there would be some resistance at this level and our market will tune into consolidation mode,” he added.

The National Stock Exchange index Nifty also ended down by 9.35 points or 0.18 per cent to close at 5,108.85.

Country’s two biggest software exporters TCS and Infosys fell by close to two per cent each on worries of rupee gaining further against the US dollar.

Telecom stocks continued to slip on concerns on intensifying tariff war and increasing competition in the sector. Bharti Airtel at 4.21 per cent was the biggest loser among all Sensex stocks.

Brokers said market leader Reliance Industries faring poorly also dampened the investor spirit. RIL declined 0.31 per cent to Rs 2,171.40.

Inflation rising to 0.92 per cent for the week ended October 3 also cast a shadow on markets. It is widely feared inflation rising further could exert pressure on the Reserve Bank to reverse its soft money policy.

European shares also fell on profit-taking after hitting one-year high in early trade, impacting the sentiment here.

Key benchmark indices in France, Germany and UK were down between 0.05-0.36 per cent.

Asian stocks advanced for a third day today, as indices in China, Hong Kong, Japn, South Korea, Singapore and Taiwan were up between 0.19 per cent to 1.77 per cent.

Major losers in Sensex pack were Sun Pharma by 3.50 per cent, Rel Infra by 3.40 per cent, besides Airtel, TCS and Infosys. Hind Unilever at 1.40 per cent and Wipro were other prominent losers.

Banking stocks, however, bucked the trend to post gains.

State-run SBI continued its winning stream and closed higher by 2.69 per cent, the highest among all sensex stocks.

Tata Power at 1.91 per cent, Sterlite at 1.84 per cent, ICICI Bank at 1.66 per cent and HDFC Bank at were other big gainers

Market breadth continued to remain strong as 1,401 stocks ended with gains against 1,357 that finished with losses.

The trading volume dropped to Rs 6,538.56 crore from Rs 6,895.34 crore on Wednesday. SBI topped the list of highest traded securities with a turnover of Rs 219.76 crore, followed by RIL (Rs 180.78 crore), Bharti Airtel (Rs 174.19 crore), REL Com (Rs 153.58 crore) and Jindal Steel (Rs 152.62 crore).

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