Markets shed early gains to trade flat on Wednesday, as losses in technology stocks partially offset strength in banks and broader Asian equities, while appetite also dropped as the risk of an economic downturn hangs over markets.
"Domestic equities are still in a directionless trend because of very high global volatility but mostly this is a sell-on-rise market," said Prashanth Tapse, vice-president of research at Mehta Equities.
"With respect to today's FOMC meeting highlights, there may be some harsh statements on inflation and interest rate hikes so the market is simply discounting that."
Nifty IT fell as much as 2.7% to its lowest level since last June, with Infosys, Tata Consultancy Services and Wipro dropping as much as between 1% and 2%.
Hiring freeze and an increase in employee termination to cut costs are likely to slow down the unprecedented demand for tech talent in the coming quarters, a Nomura analyst said in a note.
"This could lead to a material fall in attrition in FY24, a margin tailwind for the (IT) sector," the note added.
Lending some support to the Nifty 50, the Nifty's finance, banking, and private sector banks' sub-indexes rose more than 1% each.
Adani Ports fell 3.4% and was among the top losers in the Nifty 50. The port operator on Tuesday a 20% decline in its March-quarter net profit.
Airline operator InterGlobe Aviation fell 1% ahead of its quarterly earnings results.
Asian stocks were mostly in the positive territory even as global growth concerns loomed and a weak US economic data weighed on Wall Street. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7%.
Investors await minutes from the Federal Reserve's latest policy meeting due later in the day. The US central bank had pledged to aggressively tackle persistent price growth by hiking the cost of borrowing.