The benchmark BSE index fell nearly 1 per cent on Thursday, its biggest single-day fall in three weeks, as caution set in ahead of the US Federal Reserve meeting, while Infosys slumped on worries about its outlook.

Caution ahead of industrial production data for April, which is due tomorrow, also influenced the sentiment.

The 30-share BSE index Sensex ended lower by 257.20 points or 0.95 per cent at 26,763.46 and the 50-share NSE index Nifty ended down 69.45 points or 0.84 per cent at 8,203.60.

Among BSE sectoral indices, IT index fell the most by 2.17 per cent, TECk 1.81 per cent, FMCG 1.6 per cent and capital goods 0.81 per cent. On the other hand, metal index was up 1.59 per cent, oil & gas 1.19 per cent, PSU 1.1 per cent and infrastructure 0.39 per cent.

Major Sensex losers were Infosys (-4.27%), Hero MotoCorp (-2.75%), ITC (-2.29%), HUL (-2.28%) and Dr Reddy's (-1.95%), while the major gainers were Coal India (+2.13%), ONGC (+1.99%), Reliance (+1.81%), NTPC (+1.66%) and Cipla (+1.51%).

Infosys was the biggest percentage loser on both NSE and BSE indexes.

The stock fell after a media report quoted chief operating officer U B Pravin Rao as telling investors that overall demand for its services remained "volatile''.

Dr Reddy's Laboratories was the top loser on the Nifty pharma index, dropping to its lowest since May 26, after the US Consumer Product Safety Commission charged the drugmaker with having failed to comply with rules on child resistant packaging for five of its products.

The company, however, said it “firmly disagrees with the (U.S.) government's allegations,” and added it would continue cooperating with US authorities.

Among gainers, oil refiner Bharat Petroleum Corp Ltd rose as much as 2.6 per cent after the country's central bank raised the limit for foreign shareholding in the company to 49 per cent.

Global events, monsoon eyed

Indian shares have outperformed their Asian peers since the end of February as investors bet an improving domestic economy would boost corporate earnings. The BSE has surged around 17 per cent during that period compared with about 12 per cent for the MSCI's Asia-Pacific index excluding Japan..

But traders are see a more cautious period ahead as the Fed gears up to meet next week, while the UK is due to vote on whether or not to leave the European Union later this month.

At home, traders are monitoring the progress of the monsoon, which arrived in southern India on Wednesday, a day later than forecast.

“The market is taking a breather as investors keenly wait for the US Federal Reserve meet next week and the impact of India's monsoon,” said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services Ltd.

Global markets

Asian stocks turned lower on Thursday, led by sliding Japanese equities, while a weaker dollar buoyed commodities such as gold and crude oil.

Spreadbetters expected a lower open for Britain’s FTSE , Germany’s DAX and France’s CAC with a stronger euro seen weighing on European shares.

A report by SMC Global said: "Asian stocks retreated from a six-week high as a strengthening yen pressured Japanese shares, overshadowing gains from energy producers amid a rally in crude. US stocks closed higher Wednesday as oil prices settled at their highest levels in nearly a year.

The Dow Jones Industrial Average rose 66.77 points or 0.4 per cent to close at 18,005.05. Consumer prices in China were up 2.0 per cent on year in May. That was beneath forecasts for 2.3 per cent, which would have been unchanged from the April reading. Food prices were up 5.9 per cent on year. On a monthly basis, consumer prices slipped 0.5 per cent after dipping 0.2 per cent in April. The bureau also said that producer prices fell 2.8 per cent on year versus expectations for a decline of 3.2 percent after sliding 3.4 per cent in the previous month."

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