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Markets ended lower for the third straight session weighed down by information technology shares after TCS reported lower-than-expected revenue growth in constant currency terms in the fourth quarter while profit taking in private lenders and pharma shares further added to the losses.
The 30-share Sensex ended down 224 points at 28,442 and the 50-share Nifty ended down 101 points at 8,606.
"Investors seem to have started trimming their positions in IT shares following the weak growth from TCS and are overall cautious ahead of fourth quarter numbers from large companies," said Alex Mathew, Head of Research, Geojit BNP Paribas Financial Services.
The broader markets were ended lower with BSE Mid-cap down 2% and Small-cap index slipped 1.5%.
Foreign institutional investors were net sellers in equities to the tune of Rs 214 crore, as per provisional stock exchange data.
ECONOMY
Meanwhile, the Economist Intelligence Unit (EIU) said that the Indian economy is expected to grow at an average annual rate of 7.1% through 2019, but reform measures announced by the government are "no more than incremental improvements". EIU, which is the research-arm of the London-based publication, The Economist.
SECTORS & STOCKS
IT, Healthcare and Bankex indices were the top losers on the BSE down 1.6-3% each while Metal was the top gainer up 1.1%.
IT shares weakened after lower than expected revenue growth during the fourth quarter by TCS. Constant currency revenue growth came in lower than expected 1.6% in the fourth quarter, against some analysts' expectations of about 2%. TCS was the top loser down over 4% while Infosys and Wipro ended down 0.7-2.5% each.
Private lenders also witnessed profit taking with Axis Bank, ICICI Bank and HDFC Bank down 0.8-3.1% each. Foreign portfolio investors have pared their holdings in at least 21 banks in the March quarter (fourth quarter, or Q4) on concerns of deteriorating asset quality and the impact it would have on earnings of the lenders, according to media reports.
Sun Pharma ended down 4.6% on the back of improved liquidity after 334.96 milllion shares issued by the drug maker on amalgamation of Ranbaxy Laboratories were permitted for trade from today. Among other pharma shares, Dr Reddy's Labs ended down 0.7%.
Lupin extended losses to end 6.9% lower after Aurobindo Pharma got final approval from the US Food and Drug Administration (USFDA) to make and sell its generic version of oral suspension of antibiotic Cefixime.
Metal shares bucked the weak trend and ended higher led by Tata Steel, up 2.5% on high production in the financial year 2014-15. The steel major has achieved its highest ever annual sales volume of 8.75 MT in the recently concluded fiscal. Sesa Sterlite has gained 3.5% and Hindalco rose nearly 2% on talk that insurance major Life Insurance Corp (LIC) has increased its stake in the company.
RIL pared early gains to end marginally down ahead of its its January-March 2015 quarter results later during the day. Analysts expect the company to post a record fourth quarter net profit as benefitting from refining margins, which will be partially offset by lower petrochemical margins. From the oil and gas sector, ONGC is up 0.8% while GAIL is down nearly 2%.
Among other shares, CRISIL ended down 7% after 18% year on year drop in its consolidated net profit at Rs 56.32 crore for the quarter ended March 31, 2015 (Q4). The rating agency had profit of Rs 68.71 crore in a year ago quarter.
GLOBAL MARKETS
Asian markets ended lower with the exception of China. Shares in Japan lost ground amid weak-than-expected US housing data. The benchmark Nikkei ended down 1.2%. Singapore's Straits Times ended down 0.2%. However, China shares surged to fresh 7-year highs and the Shanghai Composite ended up 2.2%
