Indian shares declined on Friday to snap a six-day winning streak, dragged by information technology (IT) stocks after top software services provider Infosys slashed its revenue outlook and flagged weakness in client spending.
The Nifty 50 index settled 1.17% lower to 19,745, while the S&P BSE Sensex lost 1.31% to 66,684.26. Despite the slide on Friday, the benchmarks extended gains for the fourth straight week, rising nearly 1% each.
IT fell 4.09%, with Infosys losing over 8% and dragging the markets down with it. The company, which reported a 10.9% rise in June-quarter profit on Thursday, halved its full-year revenue growth outlook, citing cuts in tech spending.
"The guidance cut from Infosys is a big shocker," wrote three analysts from Kotak Institutional Equities. "The weaker outlook is not just Infosys-specific but captures a broader slowdown in the sector in key verticals."
Consumer goods firm Hindustan Unilever lost 3.67% after missing June-quarter profit view on higher costs.
Index heavyweight Reliance Industries fell 3.10% ahead of its June quarter results, post market hours on Friday. Global brokerage Macquarie downgraded the stock to "underperform" from "neutral" citing unfavourable valuations.
The slide in domestic equities comes after six straight sessions of gains, in which the benchmarks scaled fresh record highs.
"The short-term texture of the market is over-bought, hence we could see some profit booking at higher levels," said Shrikant Chouhan, head of research (retail) at Kotak Securities.
Among individual stocks, Larsen & Toubro gained 3.88% to a fresh record high after bagging a construction order worth 70 billion rupees. The company will also consider a proposal for buyback of equity shares and payment of special dividends.
Union Bank of India jumped nearly 4%, pulling public sector banks up 0.25%, after posting higher June-quarter profit.
