The markets have moved lower in the noon trade, reversing the earlier gains, as growth concerns outweighed the sentiment boost on rate cut hopes and forthcoming stimulus plan.
Asian markets were mostly lower as a slew of dismal US economic news overshadowed big rate cuts from central banks in Europe.
The Sensex is down 203 points at 9,026 on profit booking while Nifty has lost 54 points at 2,773.
“There are concerns on earnings de-growth and portfolio outflows,” said Ved Prakash Chaturvedi, CEO of Tata Mutual Fund. “The stimulus package is not enough to reverse market pessimism. The stimulus package has been factored into many infrastructure and construction stocks.”
Heavy selling was seen in IT, metal and consumer durables stocks. Frontline IT stocks like Infosys, TCS, Satyam and Wipro have lost between 3 per cent to 4.8 per cent.
Among the Sensex stocks, besides the frontline IT stocks, JP Associates is down over 5 per cent. The other major losers include Tata Steel, Rel Infra and DLF. Among the gainers, Tata Motors is up over 2 per cent.
In Asian markets, Japan's Nikkei 225 average slipped 6.73 points, or 0.1 percent, to 7,917.51 and markets in Australia, Shanghai, Taiwan, Indonesia and Malaysia also retreated. Hong Kong's Hang Seng index gained 1.9 percent to 13,771.05 and South Korea's Kospi was up 2.1 percent at 1,028.13.
"There is no major funding going into the market, so it is losing momentum," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. "Major investors are still staying on the sidelines," he said.
Big interest-rate cuts by the European Central Bank and Bank of England failed to give much of a lift to sentiment and investors also contended with a raft of weak data on the world's largest economy.
On Wall Street Thursday, the Dow Jones industrial average slid 215.45 points, or 2.5 percent, to 8,376.24.
The number of Americans claiming unemployment benefits last week reached its highest level in 26 years, while factory orders plunged a higher-than-expected 5.1 percent in October. A U.S. Labor Department unemployment report due Friday was expected to show the jobless rate rose to 6.8 percent in November as companies slashed 320,000 jobs.
Wall Street futures pointed to modest gains in the U.S. on Friday with Dow futures up 21 points, or 0.3 percent, at 8423 and S&P500 futures up 2.4 points, or 0.3 percent, at 849.
Mainland China's shares were mixed, with the benchmark Shanghai Composite Index slipping 0.6 percent, to 1,989.57. The smaller Shenzhen Composite Index rose on expectations that government stimulus policies will help listed small and medium-size businesses.
Shanghai market heavyweight PetroChina fell 1.1 percent to 11.48 yuan as oil prices slipped to their lowest level in four years, dipping below $44 a barrel in Asian trading.