Benchmark indices the Sensex and the Nifty slipped into the red, erasing all gains after hitting new highs of 74,501 and 22,619 on April 4 morning. The reversal came after investors booked profits across select counters.
Nifty Midcap 100 continued to trade in the green after scaling new peak of 50,101.
Analysts said the stage is set for the Nifty to hit 23,000 in the coming weeks, as most of the corrective period is over.
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Vaishali Parekh, the senior vice president of technical tesearch at Prabhudas Lilladher, expects the Nifty to race up to 23,400 in the coming days once it goes past 22,800. "The support for the day is seen at 22,300 for Nifty, while resistance is set around 22,600," she added.
Sameet Chavan, Head Research, Technical and Derivative-Angel One, foresees sectoral rotation keeping the traders busy in the coming sessions. He advised investors to maintain exclusivity in stock selection.
Broader markets higher in the first hour of trade, as Nifty midcap 100 and Nifty smallcap 100 indices surged up to 0.5 percent. The fear gauge India VIX ticked up by a percent to 11.54.
Stocks and sectors
Sectorally, Bank Nifty was the top performer, led by gains in HDFC Bank, Kotak Mahindra Bank, and Axis Bank.
HDFC Bank was the top Nifty gainer after it reported a 55.4 percent year-on-year (YoY) growth in gross advances at Rs 25.08 lakh crore in the fourth quarter of FY24 (Q4FY24).
The Nifty metal index also joined the bullish trend to gained 0.6 percent, led by Vedanta and Hindustan Zinc. Both stocks gained on healthy production. While Hindustan Zinc reported highest-ever quarterly refined metal production of 273 kilo tonne (KT), Vedanta's alumina refining capacity rose to 3.5 million metric tonnes per annum.
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Profit-booking weighed down Nifty pharma and media indices.
Global markets mixed on US Fed's hawkish tone
The US markets were mixed overnight, as NASDAQ Composite and S&P 500 indices gained up to 0.2 percent, while the Dow Jones slipped 0.1 percent.
Investors fear that the US Federal Reserve may keep rates higher for longer after Jerome Powell said it the central bank would need more information before easing monetary policy. Fed fund futures data suggests 62.3 percent of a potential rate cut in June, down from 70 percent a week ago.
However, Asia-Pacific markets were on a strong footing. Australia's S&P 200 index inched up to 0.5 percent followed by a percent gain in Japan's Nikkei 225 and South Korea's Kospi.
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