Indian shares dropped for the third straight session and closed 1.65 percent lower on Tuesday, taking their cues from Asian and European markets that fell on fears over a deepening eurozone debt crisis. The 30-share BSE index ended 309.77 points lower at 18,411.62 points, with 28 of its components losing ground.
The 50-share Nifty index fell 1.6 percent to 5,526.15 points. In the broader market, 1,063 losers beat 368 gainers on a volume of about 527.19 million shares. Software services bellwether Infosys dragged the index down, falling as much as 5.96 percent after its quarterly earnings missed expectations.
India's No 2 software services exporter reported a 15.4 percent rise in first-quarter profit and warned it faces a volatile global economy and a possible slowdown in client spending. Rivals Tata Consultancy Services and Wipro also slipped 0.98 and 1.5 percent, respectively.
India's industrial output in May rose at a much slower-than-expected pace, indicating taut monetary policy and high inflation were acting as brakes on the economy, although the central bank is still expected to raise rates later this month to contain stubbornly high inflation. The annual 5.6 percent growth in production at factories, mines and utilities was its slowest in nine months under a new data series, well below the forecast for an 8.2 percent rise in a Reuters' poll.
Indian Prime Minister Manmohan Singh retained key allies in a cabinet reshuffle on Tuesday, shunning big changes in a bid to hold onto power amid charges of graft and policy paralysis. Leading lenders State Bank of India, ICICI Bank and HDFC Bank fell between 0.7 and 1.77 percent. The broader banking index closed 1.04 percent lower.
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