Benchmark indices Sensex and Nifty erased early gains to trade lower on Thursday as IT shares declined after TCS stated that headwinds continue for the sector amid a sluggish economic climate.
The 30-share Sensex opened higher and rose further by 104 points to hit a high of 66,577.60 as banking, auto and metal shares advanced in line with positive global markets.
However, the gains were offset by losses in IT shares, dragging to the 30-share index down by 84.16 points or 0.13 per cent to 66,388.89 at 9.50 AM.
The broader Nifty also retreated from early highs to trade 23.70 points or 0.12 per cent down at 19,787.65. It moved between a high of 19,843.30 and a low of 19,784.55 in morning trade.
Rate-sensitive stocks gained after US Federal Reserver's meeting minutes released on Wednesday suggested that the US central bank would not raise interest rates in the near future amid uncertain economic conditions.
Among Sensex shares, IndusInd Bank, Axis Bank, SBI, Tata Motors, JSW Steel, ICICI Bank, Maruti, Tata Steel, and M&M advanced in early trade.
However, the gains were negated by more than 1 per cent fall in IT major TCS which emerged as leading Sensex loser.
The company has stated that the headwinds for the IT sector continue amid a sluggish economic climate. The country's largest software exporter TCS on Wednesday reported an 8.7 per cent increase in its September quarter net profit to Rs 11,342 crore.
The Tata Group company also announced a Rs 17,000-crore share buyback on top of committing a nearly Rs 3,300-crore dividend payout.
Other IT stocks such as Tech Mahindra, Infosys and Wipro also declined. Losses in Reliance, HUL, L&T and Bharti Airtel also weighed on the benchmark index.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, "There are positive developments that can strengthen the rally in the market.
"Steadily declining trend in the dollar index and the US bond yields, declining crude and sharp dip in FII selling in the cash market are big positives for the market. If the US CPI inflation data expected tonight dips below 3.6 per cent that will be a shot in the arm for the bulls." Asian markets, including Japan, China and Hong Kong, were trading with gains following advances in the US markets overnight.
The Hang Seng in Hong Kong advanced 1.75 per cent, Nikkei 225 in Japan gained 1.48 per cent while South Korea's Kospi was up 0.93 per cent.
On the domestic front, Sensex had spurted by 393.69 points or 0.6 per cent to close at 66,473.05 while Nifty climbed 121.50 points or 0.62 per cent to settle at 19,811.35 on Wednesday.
Foreign Institutional Investors (FIIs) continued to be net sellers as they offloaded shares worth Rs 421.77 crore on Wednesday, according to data available with BSE.
Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.
