BENGALURU: Indian shares reversed course to trade lower on Thursday, dragged by heavyweight bank stocks on earnings worries and due to profit-booking with the benchmarks near record highs.

The NSE Nifty 50 fell 0.29% to 24,256.8 as of 11:17 a.m. IST, while the S&P BSE Sensex shed 0.35% to 79,646.61, reversing early gains of about 0.3% each.

They dropped about 0.5% in the previous session, easing off all-time highs.

Seven of the 13 major sectors logged losses.

The broader, more domestically focused small- and mid-cap indexes were flat.

“The Nifty has slipped into profit-booking mode,” said Nagaraj Shetti, an analyst at HDFC Securities.

Heavyweight banks and financials dropped about 0.75% each, extending losses from the previous session as analysts flagged slightly weaker quarterly results.

TCS, India’s top IT services company, gained 0.2% ahead of its quarterly results, due after the close, which kicks off the roughly month-long earnings season.

Analysts expect this to give the market a clear direction.

Indian shares ease off record highs; Maruti extends gains

“Besides earnings and the commentary, the joker in the pack for Indian markets is the Federal Reserve’s timing of a rate cut,” said Kranthi Bathini, director of equity strategy at Wealthmills Securities. Fed Chair Jerome Powell told lawmakers that “more good data” would build the case for rate cuts.

The odds of a rate cut in September are about 75% and will get the next cue from data later in the day that is expected to show easing US inflation.

Among other stocks, HPL Electric surged 13% to a record high on winning orders worth 21 billion rupees.

Yes Bank rose 6% after Bloomberg News reported that multiple investors were weighing bids for a $5 billion stake in the lender.