Markets closed lower for a third straight session on Wednesday, pressured by sharp losses in IT stocks, while a risk-off sentiment prevailed on fears of a global economic downturn.
"Domestic equities are still in a directionless trend because of very high global volatility but mostly this is a sell-on-rise market," said Prashanth Tapse, vice-president of research at Mehta Equities.
Nifty IT closed 3.4% lower, having dropped to its lowest in the session since last June. Infosys, Tata Consultancy Services and Wipro fell between 2% and 3.6%.
A hiring freeze and an increase in employee termination to cut costs are likely to slow the unprecedented demand for tech talent in the coming quarters, a Nomura analyst said in a note.
"This could lead to a material fall in attrition in FY24 forecast, a margin tailwind for the (IT) sector," the note added.
Among individual stock moves, Asian Paints was the top percentage decliner on the Nifty, falling 8%.
Zinc miner Hindustan Zinc closed 3% higher. It had jumped as much as 7.7% in the session after media reports the government has approved the sale of its stake in the company.
Coal India and InterGlobe Aviation fell 0.9% and 2.2%, respectively, ahead of quarterly earnings results.
Equities in the broader market moved cautiously higher on Wednesday as investors await minutes from the US Federal Reserve's latest policy meeting due later in the day. The US central bank had pledged to aggressively tackle persistent price growth by hiking the cost of borrowing.
