Indian shares closed 0.31 percent down on Wednesday, after gaining as much as 1.3 percent during the day tracking firm Asian markets, as investors booked profits and inflows from institutional investors remained lacklustre.
The 30-issue benchmark BSE index closed 41.80 points lower at 13,340.21 points, with 22 component stocks losing ground. It traded in a 336-point range during the day.
"It's become a trader-driven market as there is lack of support from foreign and domestic institutional investors at this point of time," said Sejal Doshi, chief executive officer at FinQuest Securities.
"The volatility is too high. We could see such range bound movement at least till the end of (derivatives) expiry."
Stock exchanges will settle their monthly derivatives contracts on Dec. 28.
The 50-issue NSE index fell 0.43 percent to 3,815.55 points. The trend was negative in the broader market with 1,444 losers beating 1,099 gainers on volume of 189.7 million shares.
The BSE index fell 2.5 percent on Tuesday, snapping a four-day rise.
Foreign institutional investors (FIIs) have bought $8.4 billion worth Indian equities this year, compared with $10.7 billion in 2005. FIIs, which invested nearly $2 billion in Indian equities in December 2005, have been net sellers this month.
Top bus and truck maker Tata Motors, which fell 3.1 percent to 835.95 rupees, led the pack of losers, followed by top motorcycle maker Hero Honda Motors Ltd., which lost nearly 3 percent to end at 730.55 rupees.
Top private steelmaker Tata Steel Ltd. rose 2.3 percent to 465.10 rupees after Britain's takeover watchdog set a Jan. 30 deadline to make revised offers for Anglo-Dutch steelmaker Corus Group.
Elsewhere in the region, Colombo's All-Share index ended 0.2 percent up at 2,716.93, while Karachi's 100-share index closed 1.26 percent higher at 10,182.46 points.
STOCKS THAT MOVED
* Software services firm Four Soft Ltd. rose 4.4 percent to 71.15 rupees after the firm said its board approved buying Denmark's Transaxiom Holdings A/S for $10 million in a cash-and-stock deal.
* Gitanjali Gems Ltd. rose 3.5 percent to 221.35 rupees on news it had acquired 97 percent of U.S.-based jewellery retailer Samuels Jewelers Inc.
* Real estate firm Peninsula Land Ltd. fell 7.7 percent to 630.15 rupees on fears of earnings dilution after the firm decided to issue 2.6 million shares to qualified institutional buyers at 600 rupees a share. The issue price was at a discount of 12 percent to Tuesday's closing price of 683.05 rupees on BSE.
MAIN TOP THREE BY VOLUME
* Teledata Informatics Ltd. on 9 million shares.
* Sobha Developers Ltd. on 7.3 million shares.
* Ruchira Papers Ltd. on 4.1 million shares.
