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The BSE Sensex fell for a third straight session on Wednesday to its lowest closing level in nearly two months, as exporters slumped after weak macroeconomic data stoked worries about global economic growth.
Losses, however, were limited as cyclical stocks gained after the International Monetary Fund (IMF) raised its FY15 gross domestic product (GDP) growth estimate for India to 5.6 per cent from 5.4 per cent, raising hopes of a much-talked-about cyclical recovery in the domestic economy. "A large part of today's fall is due to underperformance in the IT sector," said Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services Ltd.
Investors were cautious ahead of the minutes of the US Federal Reserve's last policy meet due later in the day.
The benchmark BSE Sensex fell 0.1 per cent, or 25.18 points, to 26,246.79, while the broader Nifty dropped 0.12 per cent, or 9.70 points, to 7,842.70. Both the indexes marked their second consecutive close below the 50-day moving average and lowest close since August 14.
Exporters led losses. Infosys fell 1.2 per cent after Citigroup downgraded the stock to "neutral" from "buy", saying "positives are adequately discounted." Tech Mahindra fell 4.7 per cent after Citigroup cut its rating to "sell" from "neutral", while Mindtree lost four per cent after a downgrade to "sell" from "buy".
Pharmaceutical exporters also declined as investors pared positions ahead of the July-September earnings season. Sun Pharmaceutical Industries fell 4.2 per cent, Dr. Reddy's Laboratories lost 4.3 per cent and Cipla ended down 2.8 per cent.
Jubilant FoodWorks fell 1.2 per cent after rival Yum Brands cut its 2014 earnings forecast on Tuesday.
Oil companies surged after Brent fell to a 27-month low on concerns about global growth and oil glut. Hindustan Petroleum Corp surged 5.6 per cent, Indian Oil Corp jumped 6.9 per cent and Bharat Petroleum Corp advanced 3.7 per cent.
Among explorers, Oil and Natural Gas Corp gained 2.4 per cent, while Oil India rose 1.2 per cent.
