Indian shares pulled away on Wednesday from 5-1/2-month highs struck at the start of the week with high crude oil prices weighing on a market awaiting the start of the quarterly earnings season.
Bond prices eased for the ninth straight day as the latest spike in global crude prices fuelled worries of higher inflation and an upward rise in interest rates.
The Mumbai Stock Exchange's top-30 share index ended down 0.8 percent at 5,713.75 points. It struck a 5-1/2-month high of 5,766.30 points on Monday, its best close since April 23, on rising foreign fund inflows into the stock market on expectations that steady demand in the economy will boost corporate earnings.
"The market had to ease after the recent rise and we think it will stay under pressure until the end of this week," said Sandeep Shenoy, strategist at Pioneer Investcorp.
"There has been some unwinding of positions and reshuffling of portfolios," he said.
India's top 3 exporters of software services - TCS Ltd, Infosys Technologies Ltd and Wipro Ltd - report earnings next week along with the top drug maker by sales, Ranbaxy Laboratories Ltd.
Refiners fell on Wednesday after Petroleum Minister Mani Shankar Aiyar said the burden of soaring global crude oil prices would be shared equitably by consumers, the government and oil firms.
State-run Bharat Petroleum Corporation Ltd dropped 2 percent while Hindustan Petroleum Corporation Ltd fell 1.9 percent.
Grasim Industries Ltd, the top cement maker by capacity, fell 2.4 percent, while Gujarat Ambuja Cements Ltd, the third-biggest producer, fell 1.6 percent.
Banking shares fell after a top government official said there was no proposal to merge state-run Bank of India and Union Bank of India as reported by a newspaper.
The yield on the benchmark 10-year bond ended at a fresh six-week high of 6.5143 percent up from the previous 6.5007 percent. The yield has now climbed about 48 basis points in the past nine sessions.
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