Domestic stocks succumbed to last-hour sell-offs on Tuesday, with the Sensex slipping over 71 points to mark its third straight-session loss as private banks put a dampener on the momentum created by IT counters.
Also, a massive plunge in the rupee's value, sustained foreign fund outflows and the developments around the Punjab National Bank scam led to a caution among participants.
Private sector lenders Axis Bank, Kotak Bank, Yes Bank, ICICI Bank, HDFC Bank saw their shares drop as much as 1.44 per cent on Tuesday, but losses were capped by technology and metals stocks.
Software industry body Nasscom on Tuesday sounded optimistic, saying the mood is upbeat and the trend is positive, which should translate into better business opportunities for IT companies.
One more silver lining was a recovery in PSU lenders, which recouped losses to end in the green on short covering.
“Market started off on a positive note due to short covering after the recent fall. But the gains did not sustain due to selling pressure in private banks and rising bond yield. Strengthening dollar and prospects of increased spending in technology set the IT index attractive. Expiry led volatility is expected in coming days and market participants are likely to stay away from the market,” Vinod Nair, Head of Research, Geojit Financial Services ltd, said.