Benchmark indices failed to hold on the early gains on Wednesday and ended on a negative note with Nifty below 25,400.
At close, the Sensex was down 131.43 points or 0.16% at 82,948.23, and the Nifty was down 41 points or 0.16% at 25,377.50.
During trading, Nifty reached a new all-time high of 25,482 points, approaching the 25,500 level.
Sensex also achieved a new record high of 83,326 points during the trade.
Small and midcap stocks underperformed the benchmark indices with the Nifty Midcap 100 dropping to 59,752 points, a 0.71% fall, while the Nifty Smallcap 100 index also tumbled by 0.64% to 19,389 points.
On Nifty 50, 29 stocks ended in the negative territory, with TCS leading at 3.4% drop while Infosys, HCL Technologies, Tech Mahindra, Wipro, Bajaj Auto, Sun Pharmaceutical, and Tata Consumer Products, all of which dropped between 3.1% and 1.5%.
Among the sectors, except bank, all other indices ended in the red with Information Technology shed more than 3% while auto, pharma, metal, oil & gas down 0.5-1%.
IT stocks experienced a sharp sell-off, leading the Nifty IT index to plunge by 3.7% to 41,820 points, falling below the 42,000 mark for the first time since September 9.
MphasiS emerged as the biggest loser, dropping 5.6%. L&T Technology Services, Persistent Systems, Tata Consultancy Services, HCL Technologies, and Tech Mahindra followed closely, each trading with losses ranging between 3% and 4%.
It is to be highlighted that the banking stocks surged sharply as investors shifted their focus from the IT and pharmaceutical sectors.
The Nifty Bank index ended the session with a 1.08% gain, closing at 52,954 points, and hit a 10-week high during the day.
Reliance Infrastructure shares gained 20% after the company settled and paid its entire obligations with Edelweiss Asset Reconstruction Co Ltd.
Torrent Power gained over 9% after it received a Letter of Intent from Maharashtra State Electricity Distribution Company for procurement of 1,500 MW energy storage capacity from the Pumped Hydro Storage Project.
Further, the SBI Cards and Payment Services shares fell 1.6% after it said it will raise Rs 5,000 crore via issue of non-convertible debentures (NCD).
The US Federal Reserve is scheduled to announce its monetary policy decision late night on Wednesday.
The market is expecting a 25 bps cut in the key interest rate, marking the first reduction in four years.
The Fed chair’s speech is expected to be a key policy event influencing sentiment in both domestic and global stock markets, which are seeking his direction on the start of the easing cycle.