Indian shares reversed early gains and shed 0.2 percent on Wednesday, halting a three-session rally as traders opted to book profits. Trade remained choppy amid subdued volumes as the year-end closed in, but investors were optimistic about the outlook for 2011 on the back of strong economic growth.
Financials led the decline, with the banking sector index dropping 0.6 percent after rising 2.3 percent in the previous session, as traders locked in gains. Top car maker Maruti Suzuki erased 2.1 percent as its chief executive said the plant was likely to roll out less units in December than in the previous month owing to a seasonal maintenance shutdown.
The 30-share BSE index fell 0.22 percent or 44.52 points to 20,015.80, with half of its components losing ground. The 50-share NSE index shed 0.3 percent at 5,984.40 points. Advance-decline ratio for the broader market was at 1.1 to 1, in a low volume of 330 million shares.
Foreign funds inflows into Indian equities, which tend to peter out towards the year end, have totalled $28.5 billion so far in 2010, aiding the benchmark index gain around 14.6 percent. Ispat Industries gained 11.3 percent after JSW Steel made an open offer to acquire upto 20 percent stake in the firm at 20.54 rupees a share, making it the most traded main stock. The stock had shed 15 percent on Tuesday. JSW Steel dropped 0.8 percent. Leading private lenders ICICI Bank and HDFC Bank dropped 0.7 percent and 1.5 percent. Top lender State Bank of India bucked the trend and edged 0.1 percent higher.
Energy giant Reliance Industries, which has the highest weight on the main index, shed 1.3 percent due to a lack of any immediate positive triggers, dealers said. The stock is down 3 percent on the year. Telecom stocks rebounded after the recent decline. Top mobile operator Bharti Airtel gained 3.1 percent after declining equal percentage points over the two previous sessions.
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