The BSE Sensex fell on Thursday for a second consecutive session, as software services exporters such as Tata Consultancy Services slumped despite its quarterly results beating estimates as investors took profits after strong recent gains.
Traders said the July-September results had already been factored into share prices, with TCS hitting a record high on Tuesday and investors already looking ahead at earnings from other sectors that are expected to be weaker.
Meanwhile, market relief at an 11th-hour U.S. budget deal gave way to worries over the economic impact of the 16-day government shutdown and prospects of a re-run early next year.
"The better results of Nifty have come. So don't generalise Nifty results on the basis of the likes of Infosys, TCS, IndusInd Bank etc. The ones that will come in later are going to surprise negatively," said Jyotheesh Kumar, executive vice president of HDFC Securities.
The Sensex fell 0.64 percent, or 132.11 points, to end at 20,415.51, for a second day of falls after climbing to its highest intraday level since November 2010 on Tuesday.
The broader Nifty fell 0.71 percent, or 43.20 points, to end at 6,045.85.
TCS fell 4.8 percent after hitting an all-time high of 2,258.85 rupees on Tuesday, and Infosys Ltd ended 2.6 percent lower as investors took profits.
TCS said late on Tuesday its consolidated net profit for the quarter rose 34 percent to 47 billion rupees compared with an average of 44.
HCL Technologies Ltd slumped 6.
Credit Suisse downgraded Larsen and Toubro to "underperform" from "neutral" and cut the price target to 713 rupees from 955 rupees, saying it expects the company's domestic order flow to have slowed down.
Tata Motors Ltd fell 4 percent, heading for its second day of decline after hitting a record high of 393.30 rupees on Monday.
South Indian Bank Ltd shares fell 1.2 percent after the lender said non-performing loans rose to 1.39 percent in July-September versus 0.86 percent a year earlier.
Among the gainers, Bajaj Auto Ltd, India's second-largest motorcycle maker by sales, rose 1.3 percent after the company reported July-September profit that beat analyst estimates.
Apollo Tyres Ltd shares rose 2.6 percent after the company said on Monday its lenders were unlikely to approve its bid for U.S.-based Cooper Tire & Rubber Co unless the $2.5 billion price tag was cut to take account of unresolved labour disputes.