The Sensex fell on Thursday, snapping a two-day recovery, as State Bank of India fell after bad loans weighed on its third-quarter earnings, while Maruti Suzuki ended lower after exclusion from MSCI index.
Shares briefly turned positive after the wholesale price index (WPI) data, but traders said the Reserve Bank of India would also factor in the persistent current account deficit into its monetary policy decisions, making the outlook for rate cuts over the rest of the year uncertain.
India's annual WPI slowed to 6.62 percent in January, government data showed on Thursday, lower than 7 percent expected in a Reuters poll of economists.
"It's encouraging to see soft WPI numbers, but at the same time we are expecting some announcements in the budget," said Vaibhav Sanghavi, director at Ambit Capital.
The weakness has also accentuated due to constant redemption pressure at domestic institutions, added Sanghavi.
0.57 percent, or 110.90 points, to end at 19,497.18.
The broader Nifty fell 0.61 percent, or 36 points, to end at 5,896.95, closing below the psychologically important 5,900 level.
State Bank of India, the country's biggest lender, fell 1.7 percent, after it posted a 4 percent rise in quarterly net profit, its smallest increase in six quarters, as higher provisions for bad loans and slower loan demand in a sluggish economy hurt growth.
Shares in Maruti Suzuki India Ltd
Shares in Indian mobile operators including Bharti Airtel Ltd
The three companies all declined to comment when contacted by Reuters. DOT officials could not be reached.
Bharti Airtel fell 4.4 percent, Idea Cellular
Dr. Reddy's Laboratories
After the market close, Tata Motors Ltd
Shares in Sahara Housingfina Corp Ltd
Shares in software service exporter Wipro Ltd
"A corporate action like our demerger of a listed company would generally result in a short-term withdrawal of the scrip from the index as it has been happening in the past where such corporate action had been initiated," Wipro said in a statement.
Wipro also said it expects restoration of the stock into the NSE index upon completion of the split in the next few months.
However, among stocks that gained, iron ore producer NMDC Ltd
Software services exporters extended Wednesday's gains on hopes of improved earnings in fiscal 2014.