Aviation stocks corrected sharply after disappointing earnings from InterGlobe Aviation that lost 10 percent.
Benchmark indices closed lower following global weakness amid US-China trade talks. The broader markets corrected more than frontliners, with the Nifty Midcap index falling a percent.
Technology, FMCG stocks, Reliance Industries and L&T pushed the market lower; but buying in ICICI Bank, HDFC and metal stocks capped losses.
The 50-share NSE Nifty closed below psychological 10,700 levels, down 38.30 points at 10,679.70 while the 30-share BSE Sensex trimmed losses to end 73.28 points lower at 35,103.14. More than two shares declined for every share rising on the BSE.
"The markets are likely to be in a wait and watch mode. In such a scenario, we advise taking some money off the table," VK Sharma, Head Private Client Group & Capital Market Strategy at HDFC Securities said.
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He feels uncertainty related to Karnataka Elections and Iran- US nuclear deal will restrict the upside in the near term.
Most global markets were lower in trade as investors digested Federal Reserve's views on inflation and shifted focus to US-China trade talks.
European markets were under pressure, with the France's CAC and Germany's DAX falling 0.3 percent each at the time of writing this article.
Among Asian stocks, Hong Kong's Hang Seng declined 1.3 percent while South Korea's Kospi fell 0.73 percent and Japan's Nikkei was down 0.16 percent. China's Shanghai Composite gained 0.65 percent and Australia's ASX 200 rose 0.80 percent.
Back home, HCL Technologies was the biggest loser among Nifty50 stocks for the second consecutive session, falling 7.5 percent and losing more than Rs 11,000 crore in market capitalisation after weak FY19 guidance.
Most brokerage houses downgraded HCL and also slashed target prices after March quarter earnings.
Nomura has downgraded HCL Tech to neutral with reduced target price at Rs 1,060 (from Rs 1,100 earlier). Antique Stock Broking also downgraded the stock to Hold from Buy and cut target price to Rs 1,030 from Rs 1,100 per share as weak organic growth guidance raised concern when peers are guiding for improved revenue growth.
Reliance Industries, L&T, Infosys, Kotak Mahindra Bank, ITC, HUL and Bajaj Finance were down up to 3.5 percent whereas ICICI Bank, Bharti Infratel, HDFC, Sun Pharma, Axis Bank, Vedanta, Tata Steel, NTPC and Hindalco gained up to 4 percent.
Aviation stocks corrected sharply after disappointing earnings from InterGlobe Aviation that lost 10 percent. SpiceJet was down 6 percent and Jet Airways dropped 12 percent.
HCC shares fell 25 percent despite management's clarification to exchanges reiterating that Lavasa continued to work closely with lenders for resolution. The auditor for Lavasa Corporation has said that the networth of subsidiaries of HCC has been fully or significantly eroded and it has significant doubts about the ability of the firm to continue as a going concern.
PC Jeweller rebounded 10 percent in late trade after falling 14 percent intraday. CEO Balram Garg told CNBC-TV18 that the company has not received any notice from any investigative agency and has not been questioned by CBI.
IRB Infrastructure, Radico Khaitan, MRF, Venkys, Adani Ports, Emami and Century Enka fell up to 7 percent after March quarter earnings.
Biocon was down 5.5 percent after the US Food and Drug Administration has issued form 483 with seven observations for Bengaluru manufacturing facility.