Nifty falls for third day; TCS adds to IT woes

MUMBAI (Reuters) - India's stock markets fell on Wednesday, on track to close down for a third straight session as Tata Consultancy Services declined after a soft quarter, adding to the IT sector's woes after Infosys' guidance cut and HCL Technologies' revenue warning.

Analysts said there were concerns over the sector's valuation and profitability as it heads into a tougher budgeting cycle and seasonal weakens.

Although TCS, India's largest software services exporter, met market expectations on Tuesday with a 14.5 pct rise in quarterly net profit, some analysts had hoped for better earnings and said the outlook for the sector could get tougher.

Investor risk appetite was also affected due to elections in Bihar and lower Asian shares after subdued inflation data from China.

"Market will remain rangebound till earnings season and Bihar elections get over," said Deven Choksey, managing director at K R Choksey Securities.

The 30-share BSE Sensex was trading 0.06 percent lower, while the 50-share Nifty was down 0.1 percent, on track for their third straight session of declines after hitting their highest level since Aug. 21 on Monday.

Technology stocks led the falls for a third day. Tata Consultancy Services slipped 4 percent, while Tech Mahindra lost 2.3 percent.

Bharat Forge fell 4.6 percent after CLSA downgraded the stock to "sell" from "buy" citing slower growth across businesses.

Shipping stocks surged after a government source told Reuters that state-owned firms may have to give half their freight business to local shippers to help rescue an industry battered by the global commodities downturn.

Shipping Corp of India jumped 7 percent, Mercator surged 7.9 percent, Great Eastern Shipping rose 2.8 percent, while Essar Shipping gained 5.3 percent.

(Reporting by Abhishek Vishnoi in Mumbai; Editing by Anand Basu)