Key Points

Sensex closed the day at 80,543.99 points, down 166.26 points or 0.21 per cent, while Nifty closed at 24,574.20 points, down 75.35 points or 0.31 per cent.

The RBI monetary policy announcements, largely in line with expectations, had hardly any impact on the markets.

Among the index constituents, Asian Paints and HDFC Life emerged as the top gainers, showcasing relative strength amid broader market weakness.

On the flip side, Wipro and Sun Pharma were the major laggards, contributing to the downside.

"Sectorally, the market breadth was largely negative. Except for Nifty PSU Bank, all other sectoral indices ended in the red. Nifty Pharma and Nifty IT were the worst performers, reflecting selling pressure in defensives and technology stocks," Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said.

"This tight range-bound movement suggests that traders are awaiting a clear directional trigger before committing to fresh positions," Shah added.

One of the key factors contributing to this cautious sentiment is the anticipation surrounding further details of the ongoing trade negotiations between India and the United States.

"The lack of clarity on this front has kept both investors and traders on edge, leading to subdued volatility and limited price action," Shah of SBI Securities asserted.

According to a recent report by Nuvama, India's equity markets are showing signs of fatigue as stretched valuations collide with slowing profit growth, undermining the country's appeal among emerging markets (EMs).

The benchmark indices have been facing substantial selling pressure at higher levels over the past few sessions, with analysts indicating uncertainty on the India-US new interim deal front, given President Donald Trump is vowing for additional tariffs over and above the already announced 25 per cent.

- ANI