Benchmark share indices ended lower on Thursday weighed down by selling pressure in Infosys after the software major slashed its dollar revenue guidance for FY13 to 5% against its earlier estimate of 8-10%.
The 30-share Sensex provisionally ended down 256 points or 1.5% at 17,232 and the 50-share Nifty ended down 71 pointsto close at 5,235.
On the macro economic front, the country's industrial output picked up more than expected in May, bolstering the case for the Reserve Bank of India (RBI) to keep interest rates high at its next policy meeting as a slow start to the monsoon puts pressure on inflation, especially food prices. IIP rose 2.4 percent in May from a year earlier, driven by manufacturing growth, data released on Thursday showed.
In Asia, Japan's Nikkei share average posted its biggest fall in more than a month, dropping below major support at its 25-day moving average on Thursday after the Bank of Japan only offered minor tweaks to its easing strategy.
The Nikkei declined 1.5 per cent to 8,720.01, its biggest daily fall since June 8 and the sixth consecutive day of decline -- the longest such streak since early April.The Hang Seng was down over 2% while the Shanghai Composite was up 0.5%.
European shares were also trading marginally lower with the CAC, DAX and FTSE down between 0.2%-0.5% each.
Back home, BSE IT index has slumped 5 per cent to close at 5,384 following the Infosys guidance. Consumer durables, capital goods, auto, metal and bankex indices also shed 1-1.5% each.
Infosys ended lower by over 8% at Rs 2,265. The company cut its sales outlook for this fiscal year amid worries clients will reduce spending on outsourcing services due to global economic uncertainty, sending its shares down nearly 10%
in early trades. The IT-major reported a marginal decline of 1.2 per cent in its consolidated net profit at Rs 2,289 crore for the quarter ended June 2012. It was Rs 2,316 crore in the previous quarter ended March 31.
Among other software shares Wipro was down 3.7% while TCS was down 1.8% ahead of its first quarter results later in the day. Mid-cap IT stocks also took a beating, Hexaware Technologies, Hcl Technologies, Tech Mahindra, Oracle Financial Services Software, Mphasis and Core Projects also ended in the red.
Other shares which dragged the Sensex include, Bharti Airtel, L&T, HDFC Bank, ICICI Bank, Bajaj Auto, ITC, Hindalco, Reliance Industries, BHEL and Maruti Suzuki also ended lower by 0.6-3% each.
On the other hand, ONGC, Hero MotoCorp, Gail India, Tata Power, Cipla, HUL, Coal India and Dr Reddy's Labs were among the notable gainers on the Sensex.
Shares of airline companies rallied on media reports the government is considering relief measures for the industry after the presidential elections later this month.
CMC, a subsidiary of TCS, rallied 7% to Rs 924 in otherwise weak market after reporting 68% year-on-year(y-o-y) rise in its consolidated net profit at Rs 58.43 crore for the first quarter ended June 2012, due to ramping up of SEZ business and an increase in the margins. Total operational income grew 48% at Rs 452 crore on y-o-y basis.
Shriram City Union Finance soared 8.2% to Rs 731, also its lifetime high, after the company said one of its promoters will acquire 17.9 million shares of the company at a maximum price of Rs 803 per share through inter-se-transfer.
The broader markets also ended lower with BSE mid-cap and small-cap indices slipping 0.6% each.
The overall breadth was negative as 1,631 stocks declined while 1,174 stocks advanced.