The Sensex and Nifty ended lower as a slump in IT shares on worries over H-1B visas outweighed positive sentiment from continued gains in Asian stocks.
The broader NSE index ended down 30 points or 0.36 per cent at 8,243.8, after hitting its highest since November 11 earlier in the day. The index ended 0.71 per cent higher for the week, its second such gain.
The benchmark BSE index closed down 110.01 points or 0.44 per cent at 26,759.23, but gained 0.5 per cent for the week.
Barring banking and healthcare, all other BSE sectoral indices ended in the negative zone. Among them, IT index fell the most by 2.54 per cent, followed by TECk 2.16 per cent, realty 0.97 per cent and FMCG 0.81 per cent. On the other hand, banking index was up 0.86 per cent and healthcare 0.25 per cent.
Top five Sensex gainers were ONGC (+1.4%), Asian Paints (+1.23%), Dr Reddy's (+1.01%), HDFC Bank (+0.82%) and HDFC (+0.46%), while the major losers were Infosys (-2.5%), TCS (-2.18%), Wipro (-2.18%), ITC (-1.56%) and Power Grid (-1.07%).
H1-B visa Bill
IT stocks were among the biggest losers as two US lawmakers reintroduced a Bill to curb the use of H-1B visas , including requiring employers to pay more for workers under the system.
The Nifty IT index fell as much as 3.2 per cent in its biggest percent loss since November 9. HCL Technologies and Tech Mahindra declined up to 4.5 per cent each.
But financials supported the index most with the NSE Bank index gaining as much as 1.16 per cent. ICICI Bank and State Bank of India rose 1.5 per cent each.
Global markets
Gains in Asian shares , with MSCI's ex-Japan Asia-Pacific shares index at four-week highs, have come as investors are increasingly hopeful about quarterly earnings and that the government will deliver a fiscally responsible budget on February 1.
“A pre-budget rally in the month of January is anticipated and soon we will see corporate earnings unfold where markets will get a direction from,” said Gaurang Shah, vice president, Geojit BNP Paribas.
A report by SMC Global said: "Asian markets are flat with mixed openings following trend in US markets, with strength in Japanese yen dragging Japanese equities lower. The lead from Wall Street provides little clarity as stocks turned in a lacklustre performance as uncertainty over some of President-elect Donald Trump's policies gave investors pause, despite solid economic data. However the Nasdaq hit a new record closing high ahead of the release of US employment and non-farm payrolls data later in the day. Service sector activity in the US saw continued growth in the month of December, according to the Institute for Supply Management report. The non-manufacturing index came in at 57.2 in December, unchanged from the November figure. A reading above 50 indicates growth in the service sector. The non-manufacturing index was expected to show a modest decrease, with the consensus estimate calling for a reading of 56.8."