Finally, the Nifty traded near its support of 5,300. A rally is possible on a close above 5,400

The market kept slipping as trade progressed on Wednesday, on dismal global cues and a decline in earnings by realty major DLF, which announced its results late yesterday. The Sensex and the Nifty opened at 17,976 and 5,389 that turned out to be the intra-day highs. Volatility was seen ahead of the expiry of the May futures and options contract that takes place tomorrow.

Global worries, a lower opening in key European markets and US futures trading in the red, prompted a sell-off by institutional investors, leading the domestic market further downward in post-noon trade. Throughout the day, the market continued the downward trend, except for a small bounce, after hitting the intra-day low. The intra-day low of 17,786 on the Sensex and 5,329 on the Nifty were the lowest since 1 March 2011.

The Sensex lost 165 points to close at 17,847 and the Nifty fell 46 points to end the day at 5,349. The advance-decline ratio on the National Stock Exchange was 494:896.

While the Sensex closed trade with a loss of nearly 1%, the BSE Mid-cap index declined 0.57% and the BSE Small-cap index fell by 0.65%.

The BSE Consumer Goods index tumbled 1.53% to emerge as the biggest sectoral loser. Other major losers were BSE IT (down 1.52%), BSE Realty (down 1.31%), BSE TECk (down 1.20%) and BSE Oil & Gas (down 0.98%). BSE Consumer Durables (up 1.23%) and BSE Fast Moving Consumer Goods (up 0.01%) were the only gainers in the sectoral space.

Jindal Steel (up 1.13%), Tata Motors (up 1%), ITC (up 0.91%), NTPC (up 0.33%) and Maruti Suzuki (up 0.12%) were the top gainers on the Sensex. The laggards were led by DLF (down 4.04%), Reliance Communications (down 2.48%), Larsen & Toubro (down 2.24%), TCS (down 2.09%) and State Bank of India (down 2.06%).

In a setback to the Cairn-Vedanta deal, solicitor-general of India (SGI) Gopal Subramanium has re-affirmed that the government can impose pre-conditions like equitable sharing of royalty in the all-important Rajasthan block, for clearing Vedanta Resources' takeover of Cairn India.

In his initial opinion on 24th March, the solicitor-general had said that the transfer of Cairn India shares to Vedanta should be allowed only if mining conglomerate agreed to treating royalty paid by ONGC as cost-recoverable from its revenues.

Markets in Asia settled mostly lower on worries that price pressures in China will force the government to continue with its hawkish stance. News of a 12.5% fall in Japanese exports in April, pushing the country into its first trade deficit, and concerns about sovereign debt issues in Europe also weighed on investor sentiment.

The Shanghai Composite declined 0.90%, the Jakarta Composite fell 0.15%, the Nikkei 225 skid 0.57%, the Seoul Composite tanked 1.26% and the Taiwan Weighted lost 0.34%. On the other hand, the Hang Seng added 0.07%, the KLSE Composite rose 0.09% and the Straits Times gained 0.18%.

Back home, institutional investors-both foreign and domestic-were net buyers of equities on Tuesday. Foreign institutional investors pumped in Rs188.16 crore into stocks and domestic institutional investors bought shares worth Rs32.95 crore.