IT drags Indian shares; Jio Financial's discovered price above estimates

Indian shares declined on Thursday, dragged by information technology stocks, while the demerged financial services unit of Reliance Industries settled at a higher-than-expected price at the end of a special trading session.

The Nifty 50 (.NSEI) index fell 0.27 per cent to 19,780.05, while the S&P BSE Sensex (.BSESN) lost 0.31 per cent to 66,891.69, as of 10:11 a.m. IST.

Shares of Reliance Industries (RELI.NS) traded in a special session to determine the share value of its demerged financial services unit, Jio Financial Services. The discovered price for Jio Financial Services was 261.85 rupees, ahead of the street estimates of 160-190 rupees.

High-weightage information technology (IT) stocks lost over 1 per cent, leading the losses in the benchmarks. IT companies had rallied for four-consecutive sessions since data showed a moderation in U.S. inflation before snapping the winning streak in the previous session. IT firms earn a significant share of their revenue from the U.S. and Europe.

Infosys (INFY.NS) topped the losers on Nifty 50 ahead of its June-quarter earnings later in the day.

Analysts advised investors to remain cautious at elevated valuations ahead of key earnings and the U.S. Federal Reserve's policy decision on July 26.

"We feel the focus should be more on stock selection given the markets are overbought, which may result in consolidation ahead," said Ajit Mishra, senior vice president, technical research at Religare Broking.

Asian markets edged higher on improved sentiment across global equities, following a surprise moderation in UK inflation.

Among individual shares, Transformers and Rectifiers India (TRNF.NS) tumbled over 15 per cent after getting "stop deal" notice from Gujarat Energy Transmission for allegedly submitting forged material dispatch clearance certificate.

Krsnaa Diagnostics lost 15 per cent after National Health Mission, Rajasthan cancelled a letter of award issued earlier to a consortium of the company.

On the other hand, milk processing firm Hatsun Agro (HAPL.NS) surged over 8 per cent after reporting rise in June quarter profit, on strong demand.