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At 10:40AM, the 30-share Sensex was down 94 points at 26,473 and the 50-share Nifty was down 34 points at 7,912.
The HSBC September services index stood at 51.6 compared to 50.6 in the previous month.
The rupee was trading higher at Rs 61.40 compared to Wednesday's close of Rs 61.61 on increased selling of the US currency by exporters and banks coupled with the dollar's weakness against other currencies overseas.
Asian markets were trading mixed with Nikkei and Straits Times marginally down. Investors in Japan adopted a wait and watch stance ahead of the bank's policy decision later in the day.
HDFC Bank and HDFC were down 1.2-2.7% each contributing the most to the Sensex decline. Other Sensex losers include, ITC, M&M and ONGC among others.
Infosys rebounded from the day's lows and was up nearly 1% while TCS gained 0.5%.
Tata Motors was up 1.3% while Maruti Suzuki gained 0.3% on launch of its luxury sedan Ciaz.
Among other shares, Ballarpur Industries has surged 10% to Rs 17.85 on National Stock Exchange after the company said its step down subsidiary Bilt Paper BV has entered into a definitive agreement with International Finance Corp. (IFC) for the sale of new shares worth $100 million.
MphasiS shares were down nearly 3% on concerns over revenues that the company receives from Hewlett-Packard (HP). HP plans to split the company into two with computer and printer business and corporate hardware and services
operations. HP owns 60% stake in Mphasis.
In the broader market, the BSE Mid-cap and Small-cap index were trading mixed.
Market breadth was nearly neutral with 1,156 gainers and 1,106 losers on the BSE.
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(Updated at 9:35AM)
Markets resumed trading after a five-day break amid mixed cues from Asian and sluggish US markets in overnight trades. The second quarter earnings will be in focus with Infosys kick-starting the September quarter earnings season on Friday.
At 9:35AM, the 30-share Sensex was down 59 points at 26,509 and the 50-share Nifty was down 22 points at 7,924.
Experts said now, investors might increase exposure to technology stocks, as typically, these were the first to announce results. “The companies with better numbers are always the ones to announce their results first. People will start by betting on IT companies first, as these have had a good quarter, and then move to other sectors, as and when the results are announced,” said U R Bhat, managing director, DaltonCapital.
Asian markets were trading mixed with Japan's benchmark Nikkei flat with as investors adopted wait and watch stance ahead of the Bank Of Japan's policy meeting and the governor's speech later. Stocks in Hong Kong seems to recover from lower levels and the benchmark Hang Seng was up 0.2%. However, the Straits Times was down 0.2%.
US stock ended with marginal losses amid volatile trade on Monday as investors turned cautious ahead of the thirs quarter earnings. The Dow Jones ended down 18 points at 16,991.91, the broader S&P 500 slipped 3 points to close at 1,964.82 and the tech-laden Nasdaq ended down 21 points at 4,454.80.
Meanwhile, Hewlett-Packard Co said it woud split the company into two with computer and printer business and corporate hardware and services operations.While the former has been lagging for a few years due to popularity of new-age form factors, the latter has been growing at a faster clip.
Experts say the Indian markets might continue to trade between 7,850 and 8,050, with a downward bias. “Technically, with the Nifty in a downtrend, traders will need to watch for a break below the immediate support of 7,842 for a continuation of the downtrend. Any pullback rallies could find resistance at 8,019-8,042,” said a HDFC Securities client note.
BSE FMCG index was the top loser down 0.8% along with Bankex, Realty and Consumer Durables. IT, Healthcare, Capital Goods indices were among the top sectoral gainers.
In the financials segment, HDFC and HDFC Bank were down 1.3-2.5% each contributing the most to the Sensex losses.
FMCG majors ITC and Hindustan Unilever witnessed profit taking and were down over 1% each.
In the auto segment, M&M and Hero MotoCorp were among the top losers.
ICICI Bank, TCS and Tata Motors were among the top Sensex gainers up 1-1.7% each.
Among other shares, Apollo Tyres has rallied nearly 6% to Rs 208 on NSE in early morning deals after the Reserve Bank of India (RBI) said foreign investors can buy up to 45% stake in the tyre manufacturer.
Market breadth was strong with 998 gainers and 600 losers on the BSE.
