The Nifty edged lower on Tuesday after hitting a nearly two-year high as data showing a continued high trade deficit renewed concerns about the current account deficit, spurring investors to book profits.
The market rallied last week after the government won the vote for FDI in retail in both the houses of parliament but gains have stalled this week as market participants wait for further reform bills, including banking reforms bill to get cleared in the ongoing winter session.
Traders are now waiting whether the parliament will pass the banking amendment bill that would provide licences to non-financial companies, which is seen as an important measure to sustain a rally in Indian shares.
The Nifty fell 0.17 per cent, or 10.10 points, to end at 5,898.80 after earlier hitting the highest level since January 07, 2011. The Sensex fell 0.12 per cent, or 22.55 points to end at 19,387.14, after earlier gaining as much as 1 percent to hit its highest since April 27, 2011. Concerns about the country's current account deficit pressured shares after data showed the trade deficit remained high at $19.3 billion in November.
The concerns about the country's finances is highlighting the importance of the government's disinvestment programme, which is taking place amidst signs of a pick up in the initial public offer market.
India is looking to sell up to $1.1 billion stake in state miner NMDC, while the telecommunications tower unit of top Indian phone carrier Bharti Airtel is set to raise up to $832 million this week.
Export-driven technology shares were among the leading decliners due to outlook concerns. The benchmark IT index has fallen 5.52 per cent so far this month, underperforming a 0.32 per cent gain in the broader NSE index.
Tata Consultancy Services fell 1.4 per cent, while Infosys fell 0.8 per cent. Rate-sensitive stocks also saw selling pressure ahead of the industrial output data on Wednesday and inflation data on Friday, which will set expectations ahead of the Reserve Bank of India’s policy-setting meeting on December 18.
