Sensex falls on profit-taking

101-point decline also triggered by global and domestic developments

The BSE Sensex fell on Tuesday, led by declines in software exporters such as Tata Consultancy Services (TCS), on profit-taking after the recent run-up on better-than-expected quarterly results by peer Infosys.

Falls also tracked weak global shares as a batch of weak earnings pre-announcements in the US sparked concerns that the coming reporting season could disappoint, leaving some indexes looking expensive after a bumper 2013.

After retail inflation in December eased to a three-month low on Monday, traders are eyeing December wholesale price inflation, seen at seven per cent and due Wednesday, and considered to be key ahead of the Reserve Bank of India (RBI)'s rate review on January 28.

Retail prices rose an annual 9.87 per cent last month, slower than expected, as vegetable prices fell, giving some relief to policymakers struggling to contain price pressures as growth hovers at a decade low.

Also, a surprise contraction in industrial production and a slowing in merchandise exports growth, which have dampened hopes of a rebound in Asia's third-largest economy, further reduces the chances of a rate rise, dealers said.

"Growth for India has bottomed out and even valuations look reasonable. Inflation has eased and I think a delay in rate action by the RBI governor signifies he might side with growth," said Nandkumar Surti, managing director and chief executive officer at JP Morgan Asset Management.

The Sensex fell 0.48 per cent, or 101.33 points, to end at 21,032.88, after rising over two per cent over consecutive sessions. The Nifty lost 0.49 per cent, or 30.90 points, to end at 6,241.85.

Software companies fell on profit-taking after the recent run-up on Infosys' better-than-expected quarterly results.

TCS fell 1.8 per cent, HCL Technologies ended down 1.7 per cent and Wipro lost 1.4 per cent. Infosys, however, closed 0.6 per cent higher. CMC fell 10.5 percent after its October-December profit rose 15.53 per cent to Rs 70.5 crore, falling short of some analysts expectations.

Ranbaxy Laboratories fell two per cent, adding to Monday's 5.4 per cent slump, after the US Food and Drug Administration raised concerns about manufacturing practices at one of its factories.

Retail stocks fell after the government in Delhi on Monday barred foreign supermarkets from setting up shop.

Trent fell 2.7 per cent, while Shopper's Stop ended 1.7 per cent lower.