Mumbai: Taking a breather after recent rally, stock markets closed lower on Wednesday as investors turned cautious ahead of the RBI’s monetary policy decision later this week and trade war concerns.

The 30-share BSE Sensex declined 312.53 points or 0.40 per cent to settle at 78,271.28 with 21 of constituents closing down and nine with gains. During the day, it went lower by 367.56 points or 0.46 per cent to 78,216.25. The NSE Nifty dropped 42.95 points or 0.18 per cent to 23,696.30. The index moved between a high of 23,807.30 and a low of 23,680.45 during the day. Profit-taking after Tuesday’s rally and the rupee plunging to record low levels also hit market sentiment. Sensex had jumped 1,397.07 points and Nifty soared 378.20 points to settle at one-month highs on Tuesday following firm global trends.

“The domestic market traded within a narrow range in negative terrain. Investors are weighing the improved domestic outlook, buoyed by a favourable budget, against lingering global uncertainties stemming from the tariff war. While declining US bond yields and lower crude oil prices have supported market sentiment, the rupee’s depreciation could offset these gains,” said Vinod Nair, head (research), Geojit Financial Services.