Benchmark indices Sensex and Nifty were trading lower in early trade on Thursday as investors stayed on the sidelines ahead of the start of earnings season, with IT major TCS scheduled to announce its Q1 numbers later in the day.
Tariff related uncertainty also led to caution in the market, analysts said.
The 30-share BSE Sensex declined 76.99 points to 83,461.90 in early trade. The 50-share NSE Nifty dipped 23.15 points to 25,452.95.
From the Sensex firms, Tata Motors, Infosys, Bharat Electronics, Bharti Airtel, HDFC Bank and Mahindra & Mahindra were among the laggards.
However, Tata Steel, Power Grid, Axis Bank and Bajaj Finance were among the gainers.
"Market is unlikely to break the narrow range in which it has been trading for more than a month now. Resilience of the global markets and sustained fund flows into Indian markets have the potential to support the market at the bottom end of the range. A clear break out of the upper range of Nifty 25,500 may happen on positive news of a trade deal between US and India. But this is partly discounted by the market and, therefore, will not be sufficient to sustain the rally well beyond Nifty 25,500," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
With the results season kicking in from today there will be lots of stock-specific action in response to results, he added.
India, which is negotiating a trade pact with the US, has not figured in the list of countries that have been issued tariff letters by the Trump administration on Wednesday so far.
In Asian markets, South Korea's Kospi, Shanghai's SSE Composite index and Hong Kong's Hang Seng were trading higher while Japan's Nikkei 225 index quoted lower.
The US markets ended in the positive territory on Wednesday.
Foreign Institutional Investors (FIIs) bought equities worth Rs 77 crore on Wednesday, according to exchange data.
"Markets are driven by two key triggers: tariff threats and TCS kicking off Q1 earnings on July 10 post-market," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.
Global oil benchmark Brent crude dipped 0.06 per cent to USD 70.15 a barrel.
On Wednesday, the 30-share BSE Sensex fell by 176.43 points or 0.21 per cent to settle at 83,536.08. The Nifty declined 46.40 points or 0.18 per cent to end at 25,476.10.
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