Benchmark equity indices Sensex and Nifty retreated from their record peaks and traded lower in early trade on April 5 as investors turned cautious ahead of RBI's interest rate decision, amid muted global trends and higher crude oil prices.
The six-member rate-setting panel, which began its deliberation on Wednesday, will announce the decision on Friday.
Also read: RBI Monetary policy 2024 live updates - April 5
The 30-share BSE Sensex tanked 196.49 points or 0.25% to 74,031.14. The broader NSE Nifty also declined 72.85 points or 0.32% to 22,441.80.
Among the Sensex constituents, 24 stocks were trading in red with Tech Mahindra, JSW Steel, L&T, Tata Steel, and Axis Bank being the major laggards.
Wipro, Bajaj Finance, TCS, and Tata Motors also saw heavy selling.
However, HDFC Bank, Bajaj Finserve, Nestle India and Mahindra & Mahindra defied the trend and were trading with gains.
On the 50-share barometer NSE Nifty, as many as 38 shares were in the negative zone while 12 were in the green.
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said the Middle East skirmishes have pushed up Brent crude to USD 91 and if oil continues to rise that can pose macro headwinds for India.
"It is possible that the exuberant Indian investors Domestic Institutional Investors (DIIs) flush with money may ignore the headwinds buy the dips imparting resilience to the market," he said, adding, "amidst market weakness, banking stocks provide opportunities to buy." Meanwhile, global oil benchmark Brent crude climbed 0.35% to $90.97 a barrel.
Asian markets were trading lower with Japan's Nikkei 225 losing 2.42% and Hang Seng of Hong Kong declining 0.69%. South Koran index Kospi was also trading 0.89% lower.
European markets ended Thursday's session on a mixed note. Germany's DAX and London's FTSE 100 gained while CAC40 of France lost.
The U.S. markets closed largely lower on Thursday.
Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,136.47 crore on Thursday, according to exchange data.
On Thursday, the BSE benchmark Sensex surged 350.81 points or 0.47% to settle at its lifetime high of 74,227.63. The NSE Nifty also hit its fresh peak of 22,514.65, gaining 80 points or 0.36%.
