Sensex and Nifty on Tuesday were dragged down by stocks of Tata Group companies after Cyrus Mistry was ousted as chairman of salt-to-software conglomerate Tata Sons, in a move that caught markets by surprise.
The Sensex ended 88 points lower at 28,091 and Nifty declined 18 points to 8,691.
Tata Sons, which is a large shareholder in a string of listed Tata Group companies, announced late on Monday that Ratan Tata would replace Cyrus Mistry as chairman in the interim.
While the Tata Sons' board gave no detailed reason for the change, some media reports said there has been discontent with some of Mr Mistry's actions, including asset sales.
Among the Tata Group companies, Tata Steel was the top percentage loser on the broader NSE Nifty, shedding 2.5 percent, while others such as Tata Power, Tata Consultancy Services and Tata Motors also dropped between 1 and 2 per cent.
"Investors are basically exercising caution due to the uncertainty surrounding the sacking," said Mugilan. K, deputy manager of research at Cholamandalam Securities.
"We are mostly seeing short-term trading on Tata stocks as traders are looking to book profit because of the situation. However, this is not likely to sustain for a long period."
HDFC Bank reported that its net profit for July-September climbed 20 per cent from a year ago to Rs 3,455 crore, just beating analysts' estimate of Rs 3,415 crore. The stock ended 1 per cent lower at Rs 1,250.
Kotak Mahindra Bank also reported its September quarter numbers. Its net profit rose 43 per cent to Rs 813 crore and its gross bad-loan ratio narrowed to 2.49 per cent at end-September, from 2.5 per cent at end-June.
Idea Cellular Ltd fell as much as 3.6 per cent after reporting an 88 per cent decline in September-quarter profit on Monday.
Adani Ports and SEZ surged 9.5 per cent to Rs 313 after the company reported better-than-expected September quarter numbers. Its net profit rose 61 per cent to Rs 1,091 crore against expectation of Rs 697 crore.
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