The Sensex and Nifty ended lower on Tuesday, as software services exporters retreated after Royal Bank of Scotland cancelled a contract with Infosys and as world stocks moved away from one-year peaks amid global concerns.
The BSE index fell 87.79 points or 0.31 per cent to 28,064.61, after declining as much as 0.75 per cent earlier in the session.
The broader NSE index dropped 29.6 points or 0.34 per cent to 8,642.55, snapping two sessions of gains.
Infosys closed 1 per cent lower after falling as much as 3.25 per cent to its lowest since December 9, 2015.
Among BSE sectoral indices, IT and TECk indices fell the most by 1.31 per cent, followed by auto 0.61 per cent and realty 0.54 per cent. On the other hand, metal index was up 1.45 per cent, infrastructure 1.42 per cent, oil & gas 0.91 per cent and capital goods 0.81 per cent.
Major Sensex losers were Cipla (+7.14%), Adani Ports (+6.12%), SBI (+1.34%), Tata Steel (+1.17%) and Lupin (+1.15%), while the major gainers were Sun Pharma (-2.35%), Tata Motors (-1.62%), TCS (-1.5%), Wipro (-1.38%) and HDFC (-1.36%).
Shares of Infosys fell as much as 3.25 per cent to their lowest since December 9, 2015 after RBS cancelled a contract to provide IT services to the bank's UK unit, Williams & Glyn.
Infosys shares have slumped about 10 per cent since the company on July 15 cut its revenue target for the fiscal year.
Other IT services providers also fell, with Tata Consultancy Services down 1.26 per cent.
Domestic sentiment was also hit as wholesale inflation soared to a 23-month high of 3.55 per cent in July as vegetables, pulses and sugar turned costlier.
Brokers said market mood also took a hit after a government data , which was released after trading hours on Friday, showed industrial output grew 2.1 per cent in June, although down from 4.2 per cent a year ago, on account of poor show by manufacturing and heavy contraction in capital goods.
Retail inflation shot up to nearly two-year high of 6.07 per cent in July, well above the RBI’s comfortable level, on surge in prices of food items as the demand for sugar, oil & fats and spices rose ahead of the festival season.
Analysts said investors also took in their stride data released on Friday showing a faster-than-expected acceleration in consumer inflation to 6.07 per cent last month, given expectations that above-average monsoon rains would cool down food prices.
Markets were closed on Monday for a public holiday.
“Market is basically wanting to play on individual stocks viz-a-viz the indices,” said Deven Choksey, managing director at KR Choksey Securities.
“On the index front, it's more of a flat market.”
Global markets
Asian shares rose to one-year highs, expanding their gains this year to almost 10 per cent, supported by a jump in oil prices and investor expectations of an extended phase of easy monetary policy around the globe.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1 per cent, bringing its gains so far this year to 9.8 per cent. Japan’s Nikkei shed 0.3 per cent.