Indian shares fell 0.4 per cent on Wednesday, snapping a two-day rally that sent these up three per cent, with investors wary ahead of the quarterly results that begin next week, amid slowing economic growth and high interest rates.
A series of rate rises since early 2010 to combat inflation, a weak rupee and sluggish consumer spending are likely to weigh on the results of many companies, while concerns remain about the impact of the euro zone debt crisis on the global economy.
Consumer goods maker Hindustan Unilever Ltd’s shares were among the biggest losers and closed 3.1 per cent lower at Rs 395.5, its lowest closing level in nearly three weeks.
Brokerage CLSA downgraded the company to “sell” from “under-perform,” citing a sharp rise in input costs and a weak macro environment that could hurt pricing power.
The main 30-share BSE index ended down 0.4 per cent, or 56.7 points, at 15,882.64, with 18 of its components in the red. It rose 0.2 per cent in opening deals and fell as much as 0.7 per cent later.
Reliance Industries fell 1.2 per cent to Rs 716.15 on profit booking by institutional investors after the stock rose 4.6 per cent in the last two sessions, even as the company got approval to develop satellite fields at its key gas block.
The broader 50-share NSE index ended down 0.33 percent at 4,749.65 points. In the broader market, gainers were ahead of losers in the ratio of 1.2:1 on a strong volume of 567 million shares.