INDIA STOCKS-Indian shares dragged down by Kotak Mahindra Bank, TCS; trade deal delay weighs

By Bharath Rajeswaran and Vivek Kumar M

July 28 (Reuters) - Indian shares fell on Monday as financials and IT declined due to weak results from Kotak Mahindra Bank and Tata Consultancy Services' layoff plans, respectively, and as uncertainty over trade talks with the U.S. hit overall sentiment.

The Nifty 50 .NSEI fell 0.63% to 24,680.9 points, and the BSE Sensex .BSESN lost 0.7% to 80,891.02.

The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 lost 1.3% and 0.8%, respectively.

Negotiations between India and the United States remained deadlocked over tariff cuts on agriculture and dairy products, dimming hopes of an interim deal ahead of U.S. President Donald Trump's August 1 deadline.

However, a framework trade agreement between the U.S. and European Union eased fears of a bigger trade war between the two allies, which account for almost a third of global trade.

Thirteen of the 16 major sectors logged losses. High-weightage financials .NIFTYFIN and private banks .NIFPVTBNK lost 0.7% and 1.7%, respectively, dragged by a 7.4% fall in Kotak Mahindra Bank KTKM.NS after it posted a drop in quarterly profit.

The IT index .NIFTYIT lost 0.7%, with Tata Consultancy Services TCS.NS shedding 1.8% after it announced plans to reduce its workforce by 2% in fiscal year 2026.

The Nifty 50 and 30-stock Sensex .BSESN have logged four consecutive weekly losses due to weak earnings, foreign outflows and uncertainty over the U.S.-India trade deal.

"Lingering uncertainty over U.S.-India trade talks, stretched valuations, and a tepid earnings season have clearly sapped market sentiment," said Ajit Banerjee, president and chief investment officer at Shriram Life Insurance.

"In the near term, tariff headlines will drive the market’s pulse, and only a strong earnings turnaround can unlock any meaningful upside."

Among individual stocks, Mphasis MBFL.NS gained 3% after it posted quarterly results in line with estimates and showed strong deal bookings, boosting the IT company's revenue growth outlook.

SBI Cards and Payment Services SBIC.NS lost 6% after missing profit estimates in the June quarter.