Indices snap 3-day winning run; Sensex falls 540 points

Mumbai: India's equity indices dropped close to 1% on Thursday, snapping their three-day winning run, led by declines in automobiles, information technology and select lenders. Trader sentiment remains cautious ahead of the February US jobs data scheduled after market hours in Mumbai that is seen as a critical factor for the US Federal Reserve in its interest rate decision in the meeting later this month.

The BSE Sensex fell by 541.81 points, or 0.90%, to close at 59,806. NSE's Nifty closed 164.80 points, or 0.93%, down to end at 17,589.

"The overall trend still remains in a bearish to sideways mode," said Rohan Patil, technical analyst at Samco Securities. "Support for Nifty is placed at around 17,400 -17,350 levels and resistance are capped at 17,800 levels."

After a rebound last week, the mood among investors has soured after US Fed Chairman Jerome Powell cautioned on Tuesday that interest rates might rise 'higher' than what was expected. With the labour market remaining tight, concerns have intensified that the US central banks might raise rates at a faster pace than what the market anticipated.

The outcome of the US non-farm payroll report on Friday and next week's February inflation readings are seen as critical for the Fed to raise a key policy rate by 25 or 50 basis points in its meeting on March 21-22.

Foreign Portfolio Investors net sold shares worth ₹561.78 crore on Thursday. Domestic institutions were modest buyers to the tune of ₹42.41 crore.

Adani Group shares ended mixed on Thursday. Out of the 10 listed Adani stocks, six ended higher, while four ended weak. Flagship entity Adani Enterprises shed 4.2% to ₹1953.10. Adani Green, Adani Total Gas, Adani Power and Adani Transmission jumped 5% - the highest tradeable limit of the day.