Indian shares fall as IT stocks join the slide in financials

BENGALURU, Jan 25 (Reuters) - Indian shares declined on Thursday, dragged by information technology stocks (IT) following disappointing results from Tech Mahindra and as financial stocks continued to drop.

The blue-chip NSE Nifty 50 index fell 0.7% to 21,298 points and the S&P BSE Sensex was down 0.8% at 70,408, as of 11:50 a.m. IST. Seven of the 13 major sectors logged losses, with the IT index sliding 1.42%.

Tech Mahindra shed 5.8% and was the top Nifty 50 loser after it posted a smaller-than-expected quarterly profit due to weak client spending.

Financial services, the heaviest weighted among the major sectors, dropped 0.55%. They have tumbled 6.2% since HDFC Bank reported disappointing margins last week.

In the six sessions since, FIIs have sold Indian shares worth ₹34,766 crore ($4.18 billion), which has pulled the benchmark Nifty 50 down about 3%.

On the day, the more-domestically focussed small- and mid-caps rose 0.6% and 0.2%. They have gained about 2% and 3%, respectively, this year, compared to a 1.7% drop in the Nifty 50.

Among individual stocks, Nifty 50 constituent Bajaj Auto rose 1% after the automaker beat profit expectations, helped by strong domestic demand. Railtel Corporation of India jumped 10% after posting a quarterly profit that almost doubled year-on-year.