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TCS ended down nearly 3% ahead of Q1 results which will be released later today while Infosys ended 2% lower.
Benchmark indices ended lower for the third consecutive session as investors turned cautious and booked profit in IT shares ahead of first quarter earnings from TCS later today.
However, rally in capital goods shares ahead of May IIP numbers on Friday stemmed the downside.
The Sensex closed at 27,534 levels, down by 114 points or 0.4% while Nifty was at 8,328, down by 25 points.
The broader markets, however, outperformed their larger peers with BSE Midcap and Smallcap indices down by 0.3% each. The health of the market was positive with 1,504 advances against 1,300 declines on the BSE.
On the currency front, the Indian rupee was quoting at 63.48, up by 12 paise against the US dollar. Meanwhile, Foreign Portfolio investors (FPIs) were net sellers to the tune of Rs.354.3 crore, according to the provisional stock exchange data.
Expert view
According to Ranak Merchant, Technical Analyst - Strategies of Sushil Financial Services,"Markets ignored the global cues in the last week and rallied above the indicated resistance zone of 8329-8350 to surpass 8500."
"Howvever as global turmoil intensified Indian markets could not remain insulated and succumbed to selling pressure.
The slippage from above 8500 zone was quick in nature and indices once again appear to be nearing support zones."
She further said, "The current correction has completed a right shoulder formation of the an 'Inverse Headand Shoulder' pattern (BULLISh pattern) seen on weekly charts.
In the event the multiple support zone of 8270-8329 holds the formation would have been complete and rally thereof could be expected. Traders watch the support zone for re-initiating long positions with initail targets placed near 8500."
Economic events
Investors are watchful of the developments in China. Chinese stocks rebounded around 6% on Thursday, as Beijing's attempts to stop a massive sell-off that had upset the global markets appeared to have yielded some results.
Further, European shares are rallying on hopes that creditors would work out with Greece to avoid Grexit after Athens presented fresh proposals on Wednesday.
On the domestic front, the market participants would be keenly eyeing the macro-economic data, which will be unveiled in the coming days.
Also, the progress in monsoons for the month of July is a key indicator that could dictate the terms on bourses.
According to Reuters poll, economists believe that the consumer price index (CPI) for the month of June would be slightly higher compared to May.
The inflation could decide whether the RBI would ease the monetary policy further.
Sectors and stocks
Sectorally, BSE IT and BSE Oil &Gas indices registered losses, finishing down by 1.9% each. On the flip side, BSE Capital Goods index capped the losses as it gained 2%.
Capital Goods sector rallied today ahead of the IIP data for the month of May that is scheduled for tomorrow.
BHEL surged 3.6% and was the highest gainer on the Sensex while L&T gained 2.4% From IT space, TCS shed 2.8% on the Sensex in anticipation of its Q1 numbers.
Infosys finished 2% down while Wipro shed 1.5%. Auto shares finished mixed on BSE. Domestic car sales increased by 1.5% in June while sales of two wheeler for the month of June rose by 3.55%.
Hero Motocorp gained 2% while M&M, Maruti, Bajaj Auto lost between 0.3-2.3% each.
Tata Motors extended its losses from yesterday on concerns that the slowdown in China would affect the auto major.
The stock ended 1.7% down
Among the banking shares, SBI and ICICI Bank gained between 02.-0.4% while HDFC twins and Axis bank lost between 0.1-0.9% Metal shares ended mixed. Hindalco gained 2% while Vedanta has lost 4.8%. Index heavyweight Reliance Industries lost 0.75%.
RIL today announced the closing of the sale of its Midstream business in Eagle Ford to Enterprise Products Partners.
Among other loser, ONGC lost 1.35 while Tata Steel and NTPC lost between 1-1.3% Yes Bank which had plunged around 7.5% in the previous session post the downgrade by UBS finished with 1% gains after the bank completed the placement of Rs 554 crore of Basel-III compliant Tier-II bonds at a coupon rate of 9.15 per cent with a tenor of 10 years.
Russian oil company, Roseneft signed an agreement with Essar group to buy 49% stake in Vadinar refinery.
The stock ended 5.4% down. Manpasand Beverages, fruit drink manufacturing company zoom around 20% on BSE, recovering from an intraday low of Rs.248.
Among other share, Bajaj Corp Q1 reported a 20% increase in standalone net profit at Rs 47.51 crore.
Overall expenses were at Rs 153.75 crore compared with Rs 138.47 crore. The stock plunged 7%
