Underlying cautious undertone in the backdrop of weak monsoon and geopolitical concerns, the survey predicted that the headline inflation would ease by the year-end, and forecast GDP growth of 5.4-5.9 per cent in 2014-15, overcoming the sub-5 per cent expansion in the past two years.
However, the forecast further dampened already fragile market sentiment after disappointment over the Rail Budget, which triggered panic unwinding yesterday. Weak global cues also weighed on Indian bourses.
Auto, tech, finance, infra, healthcare and metal shares came under heavy selling pressure, while FMCG and energy stocks defied the trend and posted gains.
After the brutal overnight sell-off, the market opened with negative bias and remained volatile through out. Despite briefly trading in positive terrain in late afternoon, the key index fell pray to intense selling.
Traders were hesitant of taking fresh position ahead of the Narendra Modi Government's maiden Budget tomorrow and keenly awaited for cues on revamping the economy, a market player said.
The 50-share Nifty fluctuated between a high of 7,650.10 and a low of 7,551.65 before concluding at 7,585, a fall of 38.20 points, or 0.50 per cent, over its last close.
Elsewhere, other Asian bourses were subdued following sluggish overnight cues from Wall Street which retreated for a second straight session after hitting record highs.
The key laggards included Jindal Steel, Tata Motors, Tata Power, Coal India, Bajaj Auto, Maruti, Lupin, M&M, TCS and United Spirits.
ONGC, BPCL, IDFC, ITC, Tata Steel, ACC, Hindalco, Asian Paints, Gail and Reliance were among the key gainers.
Turnover in the cash segment fell to Rs 19,558.77 crore from Rs 22,078.84 crore yesterday. A total of 11,894.55 lakh shares changed hands in 87,25,669 trades, while the market capitalisation stood at Rs 87,06,715 crore.