Experts expect the consolidation to continue on Friday, especially after recent run-up. They feel the Nifty may make an attempt to hit 10,000 level in near term.
The Sensex closed down 50.95 points at 31904.40, while the Nifty ended 26.30 points lower at 9873.30
The Indian rupee on Wednesday closed at a 6-week high of 64.28 to the dollar, up 0.1 percent from its previous close, tracking gains in local equity markets.
The BSE Midcap and Smallcap indices gained 1 percent each as about two shares advanced for every share falling on the exchange.
The Sensex closed up 244.36 points at 31955.35, while the Nifty ended up 74.75 points at 9901.90.
The BSE Sensex crashed nearly 450 points intraday, dragged entirely by index heavyweights ITC post hike in cigarettes cess and also to some extent Reliance Industries.
The Sensex closed down 363.79 points at 31710.99, while the Nifty ended 86.95 points down at 9829.00.
Given the current market strength, bulls are not ready to give up easily and hence, it seems the Nifty is likely to touch 10,000 level soon, even though experts consistently saying valuations are stretched.
ITC lost more than 2 percent on reports that the government may increase cess on cigarettes.
AU Small Finance Bank, CDSL, HUDCO, Avenue Supermarts, Eris Life and Tejas Networks fell up to 10 percent.
ITC, TCS, HDFC, HDFC Bank and Tata Motors were top contributors to Sensex' loss whereas Kotak Mahindra Bank, Infosys and SBI outperformed.
Markets regulator Sebi on Thursday relaxed restrictions on 32 entities against whom it had taken action in case of alleged misuse of the stock market platform for tax evasion and suspected money-laundering activities.
Regulators should prevent investment firms from setting up shop in one jurisdiction to avoid stricter controls in their home state, the European Union's markets watchdog said on Thursday.
With today's rally, the Nifty shot up more than 20 percent, so far, in the current calendar year.
The Sensex closed up 232.56 points at 32037.38, while the Nifty ended 75.60 points higher at 9891.70.
Investors looked ahead for corporate earnings (TCS & Infosys); and the data of June retail inflation & May industrial output due later today.
Biocon surged 8 percent while Tilaknagar Industries, Globus Spirits, United Breweries and United Spirits rose 1-10 percent.
The profit booking in last hour of trade hit market sentiment that dragged the Nifty below 9,800 level on Tuesday.
Tata Motors, BHEL, and Infosys gained the most, while Cipla and Wipro were the top losers.
Better-than-expected US jobs data and the value buying as well as short covering in select index heavyweights (including TCS, Infosys ahead of Q1 results) lifted the Sensex 408 points to hit intraday record high of 31,768.39.
As sweet revenge goes, the shorting of NSE shares would have been possible in its rival exchange – the BSE. NSE cannot afford the same attitude of damage control after it gets listed.
TCS, Tata Motors, Bharti Airtel, Lupin and Sun Pharma rallied more than 2 percent while HDFC was only loser.
Experts feel the 9,600 level on the Nifty is crucial in the coming week as IT bellwethers will kick off June quarter earnings season with TCS reporting numbers on July 13 followed by Infosys on July 14.
The Sensex closed down 8.71 points at 31360.63, while the Nifty ended 8.75 points lower at 9665.80.
The profit booking towards the close indicated that traders may have thought to adopt 'sell on rally' strategy due to lack of fresh trigger.