Benchmarks Sensex and Nifty significantly pared their gains from day's high on July 16 to trade in mild red due to various reasons, including profit booking and weak global cues.

At 1:41 pm, the Sensex was down 12.4 points or 0.02% at 77,173.03, and the Nifty was down 21.05 points or 0.09% at 24,057.45. About 1,757 shares advanced, 2,012 shares declined, and 173 shares were unchanged.

Key reasons behind market paring gains:

1) Profit booking

Markets saw profit booking at higher levels with Sensex falling 300 points from day's high while Nifty trading below the 24,100-mark.

ICICI Lombard General Insurance Co. fell 10% after the insurer's bottom line plunged 46%. Several brokerages either downgraded the stock or cut their target prices.

2) Weak global cues

Asian markets opened lower as a sell-off in US chipmakers affected regional stocks. South Korea's Kospi fell sharply due to SK Hynix's volatility after its US listing last week. South Korea's Central Bank raised its benchmark interest rate for the first ‌time in three and a half years to 2.75% from 2.5%. Bank of Korea has raised its seven-day repurchase rate by 25 basis points.

South Korea's Kospi fell 6.7% as shares of index heavyweights SK Hynix and Samsung Electronics fell 11% and 7%, respectively. Shares of Seoul Semiconductor, LG Innotek, and Samsung SDI fell between 1% and 5%. Japan's Nikkei opened 3% lower. Japan's Advantest fell more than 6% while SoftBank Group fell nearly 7%.

3) Technical reason

Analysts said Nifty has to cross 24,200 decisively for further upmove in the markets.

"A decisive move above 24,200 could trigger fresh momentum towards 24,300–24,400, while a breach below 24,000 may invite profit booking towards 23,900 and 23,800. With India VIX remaining subdued at 13.27, volatility is likely to stay contained, although any moderation in crude oil prices could provide the next catalyst for a stronger upside move," said Rajesh Palviya, Head of Research, Axis Direct.

"The Nifty index remains range-bound within the 24,000–24,260 consolidation zone, and a decisive breakout from this band will be crucial for the next directional move. On the downside, a sustained breach below 24,000 may open the door for further weakness towards 23,800. On the upside, a breakout above 24,260 could pave the way for a move towards 24,530," said Devarsh Vakil, Head of Prime Research at HDFC Securities.