Indices fell for a second session as sentiment took a massive hit on the US President's move to curtail outsourcing of jobs to cheaper destinations. The move saw export oriented software stocks tumble on fears of loss in revenue and higher visa costs.

Stocks also consolidated ahead of the union budget to be presented on February 1st and after a stunning 3.5 per cent rally last week. 

The Nifty lost 71 points to 8,561 points as traders partially booked profit ahead of a major event and after markets hit 13-week highs. The index closed at its lowest point of the day as earnings from blue chips Indian Oil Corp and ICICI Bank disappointed investors.

The mood took a beating after US President Donald Trump, fighting to protect US jobs, doubled the salary requirement for H1-B visas, which allow low paid Indian tech developers to work in the US. Such a worker will now have to be paid $130,000 per year from $60,000 presently, effectively cutting down the cost arbitrage that Indian software developers enjoyed for 3 decades. The bill will have to be approved by the US Senate. Meanwhile, the IT Index plunged as much as 5.2 per cent to a 3-month low but the subsequent covering of short positions resulted in the index shedding 322 points, or 3.2 per cent, at 9,848 points. TCS led all 11 stocks in the IT Index lower between 0.4-4.6 per cent.

Here are the major trading events of the day:

* Mobile services provider Idea Cellular remained the top draw on Tuesday as well. Idea is in talks with a potential merger with larger rival Vodafone India. Idea was the top gainer on the Nifty and remained in an uptrend for the 8th session in a row. The stock surged 13 per cent after Monday's stunning 26 per cent rally.

* IndusInd Bank, ITC, Bharti Airtel and Power Grid rose 0.7-0.9 per cent and were among 11 shares advancing on the Nifty.

* Bharti Infratel, TCS, Tech Mahindra, Grasim and HCL Tech dropped 3.7-11 per cent on the Nifty and were among 39 shares that declined on the index.

* Idea Cellular was the top traded stock by value and volume with Rupees 3,118 crore worth of shares changing hands. Nearly 28.30 crore shares were traded on the NSE alone.

* CPSE ETF saw frenetic trader activity as well with volumes hitting 42.71 crore units and value touching Rupees 1,154 crore. JP Power, Reliance Communications and JP Associates were also on the list of most traded by volume along with Idea Cellular, of course.

* All wider benchmarks dropped lower as profit booking was seen across the market. The Nifty 100, 200 and 500 indices fell more than 1 per cent each as traders booked partial profit ahead of the main event. Losses were higher on the midcap and smallcap benchmarks.

* There was a deep shade of red in the sectoral space with the Nifty IT index being the top loser. All four banking benchmarks ceded ground. Shares in the pharma, metals and auto sectors also lost traction. Bit gains were seen only on the FMCG index.

* The bears assumed command of sentiment on Dalal Street with 1,126 shares falling compared to just 313 that rose.

* The sentiment was worse off in the derivatives market with 157 futures dropping versus just 22 that rose.

* Futures of Bajaj Auto, Dewan Housing, Yes Bank and Tata Chemicals saw smart speculative buying. On the losing side were futures of Indian Oil, Hexaware, GAIL, Petronet LNG and Dish TV.