The Bombay Stock Exchange benchmark Sensex, which had lost 57 points in the previous session, fell 276.80 point to 16,748.29, as TCS tumbled 7.71 per cent after its Q2 earnings missed market expectations amid global slowdown worries.
Indian IT companies earn about 85 per cent revenues from the US and European economies, and both areas are battling debt and economic troubles.
Of 30 Sensex stocks, 25 closed with losses, while NTPC ended flat.
The broad-based National Stock Exchange index Nifty lost 80.75 points to 5,037.50 led by stocks of IT and realty sectors on all-round selling. A weak closing in Asian region and lower opening in Europe, after Moody's warned that its credit rating for France could be put on negative outlook, reigniting euro-zone debt fears. A weaker than expected Chinese growth data also influenced the market sentiment.
Trading sentiment has remained weak ever since the current earning season began last week, with Infosys and Reliance Industries announcing results. The IT sector index suffered the most, down 3.67 per cent to 5,462.44. Besides TCS, Infosys fell 1.61 per cent, Wipro by 2.94 per cent and HCL Tech by 8.58 per cent.
State Bank of India dropped 1.50 per cent and ICICI Bank fell 2.13 per cent. The other losers were Reliance Industries, Larsen and Toubro, Bajaj Auto, Tata Steel, DLF Ltd, Hero Motors and Sterlite Industries.