The BSE sensitive index Sensex lost nearly 1 per cent on Wednesday, after touching its highest in more than a month, as exporters such as Infosys fell on worries strength in the rupee after inflation data may persist and hurt revenues.
The Sensex dived 244.75 points or 0.84 per cent to 28,799.69 while the NSE NIfty slumped 83.80 points or 0.95 per cent to 8,750.20.
India's consumer price inflation unexpectedly slowed to a three-month low in March, while wholesale prices declined at a faster-than-expected annual rate, which could encourage the central bank to deliver another off-cycle interest rate cut to boost economic recovery.
Barring 6 stocks, all Sensex companies finished in the red. BHEL (-3.43%), M&M (-3.26%), Tata Motors (-3%), Wipro (-2.70%), Axis Bank (-2.65%) and Sun Pharma (-2.61%) were the worst hit on the Sensex.
SSLT, ONGC, SBI, ITC, Tata Power and Maruti were in the positive zone with gains of up to 3.32 per cent.
Reliance Industries ended flat ahead of its Jan-March results due on Friday, which will set the tone for quarterly earnings season expected to be bogged down by slower-than-expected recovery in economy. RIL shares ended up 0.15 per cent at Rs 923.75.
Falls also tracked weak Asian markets as relief China had matched its own growth target was soured by poor readings on consumer demand and industrial activity, underlining the need for more policy action by Beijing.
"RBI's purchase of US dollar last few quarters shows that support to USD. So IT stocks fall on rupee strength should be limited," said G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.
Earnings are expected to show only marginal improvement in the January-March quarter, he said.
Profit-taking also weighed after the 50-share NSE index rose for the last seven consecutive sessions.
Exporters led the declines. Infosys lost 1.15 per cent and Tata Consultancy Services fell 0.96 per cent.
Among drug exporters, Cipla was down 2.39 per cent
The Sensex had gained 165.06 points in the previous session on Monday as stock markets remained closed yesterday on account of “Ambedkar Jayanti“.
Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth Rs 417.01 crore on Monday, while Domestic Institutional Investors (DIIs) bought shares worth Rs 46.42 crore, as per provisional data available with stock exchanges.