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MUMBAI (Reuters) - The BSE Sensex and the Nifty on Wednesday fell to their lowest close in 2-1/2 weeks as software stocks slumped on caution ahead of India's top IT services provider Tata Consultancy Services' (TCS.NS) earnings report later in the day.
TCS rivals Wipro and HCL Technologies will report their earnings on Thursday, followed by index heavyweight Reliance Industries (RELI.NS) on Friday.
Worries that foreign investors, who have pumped $4.8 billion into Indian shares so far this year, could be booking profits also weighed. Foreign investors are seen as the primary drivers behind the stock markets' record highs touched on April 3.
Overseas investors sold Indian cash shares worth 216.3 million rupees ($3.59 million) and equity derivatives worth 12.18 billion rupees on Tuesday - their second straight session of outflows.
Higher-than-expected retail inflation, which quickened to 8.31 percent in March, driven by high food prices, was also a drag on sentiment.
"Mostly its profit-booking in momentum stocks after record highs. I expect defensives to outperform markets post elections," said G Chokkalingam, founder of research and fund advisory company Equinomics.
The Sensex fell 0.92 percent, or 207.70 points, to end at 22,277.23.
The Nifty lost 0.86 percent, or 57.80 points, to end at 6,675.30.
Both the indexes fell for a third consecutive session, to their lowest close since March 27.
Reliance Industries Ltd (RELI.NS) fell 0.8 percent as investors chose to pare positions ahead of its quarterly- earnings on Friday.
Reliance Industries' operating profit may lag consensus estimates when it reports January-March quarter results on Friday, Thomson Reuters StarMine's SmartEstimates shows.
However, Adani Enterprises Ltd (ADEL.NS) surged 3.1 percent, while Adani Port and Special Economic Zone (APSE.NS) rose 3.8 percent, with traders attributing the rise partially to the view that the group would perform well should the Bharatiya Janata Party led by Narendra Modi win the elections, given perceptions of close links between the two.