Sensex falls most in three weeks, retreats from 7-month high

The BSE Sensex came off seven-month highs today after logging its biggest single-day fall in three weeks, mirroring global caution ahead of the US Fed meet and hit by an IT sell-off after Infosys flagged volatility issues for the next few quarters.

The index plunged 257.20 points or 0.95 per cent to crack below the 27,000-mark.

There were also concerns that the recent gains in crude oil prices could adversely impact India's fiscal deficit situation and increase fuel price inflation.

"The market tanked as weak European cues and surge in oil price have turned investors risk averse," said Vinod Nair Head of Research Geojit BNP Paribas Financial Services.

India's second-largest software services firm Infosys was the worst performer with a plunge of 4.27 per cent at Rs 1,185.45 after the company said challenges in retail, energy and insurance sectors could result in "quarterly bumps". TCS followed suit and slumped 1.27 per cent to Rs 2,577.50.

Participants also preferred to cut down on their positions ahead of key economic data Industrial Production data due for tomorrow.

The Sensex resumed lower at 26,994.48 and dropped further to 26,692.35 before finishing at 26,763.46, disclosing a loss of 257.20 points or 0.95 per cent. The gauge had risen by 243.21 points in the past two days.

The NSE 50-share Nifty also dropped by 69.45 points or 0.84 per cent to close at 8,203.60.

The broader markets too felt the heat with the BSE mid-cap index falling 0.47 per cent while small-cap edged up by 0.04 per cent.

In stock specific action Hero MotoCorp fell close to 3 per cent after it reported decline in sales in May. Maruti Suzuki and Tata Motors however perked up.

Regional markets ended lower as investors weighed risks ahead of the US Federal Reserve meet next week. Japan, Singapore and South Korea based shares dropped by 0.14 per cent to 0.97 per cent.

European shares extended initial losses, dropping for a second-straight day after European Central Bank's President Mario Draghi warned Europe is at risk of suffering lasting economic damage from weak productivity and low growth.

Key indices like France, Germany and the UK fell between 0.82 per cent and 1.17 per cent.  

Back home, out of the 30-share Sensex pack, 18 scrips ended lower.

Major laggards included ITC 2.29 per cent, HUL 2.28 per cent, Dr Reddy's 1.95 per cent, Asian Paints 1.94 per cent, HDFC 1.74 per cent, Bajaj Auto 1.39 per cent, TCS 1.29 and L&T 1.21 per cent.

Key gainers were Coal India 2.13 per cent, ONGC 1.99 per cent, RIL 1.81 per cent, NTPC 1.66 per cent, Cipla 1.51 and Axis Bank 0.57 per cent.

Among sectoral indices, IT tumbled by 2.17 per cent, teck 1.81 per cent, FMCG 1.60 per cent, capital goods 0.81 per cent, auto 0.62 per cent, finance 0.54 per cent and healthcare 0.40 per cent, while metal gained 1.59 per cent, energy 1.58 per cent and oil&gas 1.19 per cent.

The market breadth turned negative as 1,339 stocks ended lower, 1,230 closed higher while 187 ruled steady.

The total turnover rose to Rs 2,801.30 crore from Rs 2,535.88 crore yesterday.