Mumbai, Oct 20 (IANS): High valuations coupled with inflationary concerns and mixed global cues pulled India's key equity indices into the red on Wednesday.

Accordingly, premium valuations triggered profit booking. This along with high crude oil prices and mixed Asian markets dented investor sentiments.

The key two indices -- S&P BSE Sensex and NSE Nifty50 -- had a gap-up opening, but fell thereafter. Globally, Asian markets were largely down following inflation worries due to surging energy prices.

Besides, European stocks struggled for direction as a relentless surge in commodity prices fuelled worries about inflation spiralling out of control.

On the domestic front, volumes on the NSE remained high but all sectoral indices except telecom ended in the red.

Consequently, the 30-scrip S&P BSE Sensex traded at 61,259.96 points, down 456.09 points or 0.74 per cent from its previous close. The NSE Nifty50 also closed lower, falling to 18,266.60 points, down by 152.15 points or 0.83 per cent from its previous close.

"Nifty fell for the second day in a row on Wednesday as profit taking across the board led to Indian markets being the worst performer in the Asian region once again," said Deepak Jasani, Head of Retail Research, HDFC Securities.

"Nifty closed at almost an intra-day low for the second session, while advance decline ratio continued to be sharply negative," he added.

According to Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services: "Profit booking was witnessed across the market as the valuations for many stocks touched unrealistic levels. The stocks termed as quality are either overpriced or priced near perfection, thus leaving very little margin for safety.

"Global cues were mixed as the earnings season is gathering momentum, while US Democratic leaders are edging closer to agreement on ways to trim the stimulus package. On the positive side, oil prices come off the recent highs after a fourth straight weekly rise in US crude inventories."

Vinod Nair, Head of Research at Geojit Financial Services, said: "The ongoing market correction is not an overreaction and can sustain in the near-term due to high valuations.

"The long-term economy and market trend is intact due to further re-opening of the economy, low-interest cycle and fiscal and private spending. This correction will give leeway to value-buying, defensives and upcoming stocks and sectors that evolved from this new demand."