Sensex, Nifty inch down; auto stocks fall

By Darshana Sankararaman

REUTERS - Indian shares fell on Thursday as auto makers such as Tata Motors slipped on lower vehicle sales, pausing after a budget with a range of incentives for companies helped stocks gain nearly 2 percent in the previous session.

Shares briefly hit their highest since late October, although they were unable to build on Wednesday's gains after the government unveiled a budget to help the poor with hikes in spending and cuts in taxes.

"There is some consolidation after the moves we saw yesterday. In the longer term, the market remains extremely positive," said Gaurang Shah, vice president, Geojit BNP Paribas.

 

Markets would also remain supported as the impact of a ban on higher value banknotes eases, analysts said.

The broader NSE Nifty was down 0.29 percent at 8,690.05 by 0609 GMT, while the benchmark BSE Sensex was 0.19 percent lower at 28,088.29.

Both indexes gained about 1.8 percent on Wednesday, their biggest single-day percentage gain since Nov. 25.

Auto stocks dropped on Thursday after reporting lower January sales, with the Nifty auto index falling as much as 1.17 percent.

Mahindra and Mahindra Ltd and Tata Motors Ltd were down about 2 percent each, among the top percentage losers on the NSE index.

ITC Ltd rallied as much as 3.8 percent to a record high after the budget proposed a lower-than-expected increase in excise duty on some cigarette categories.

Asian shares meanwhile hit four-months highs after the U.S. Federal Reserve held interest rates steady on Wednesday, without giving a firm signal on the timing of its next rate move.

(Reporting By Darshana Sankararaman in Bengaluru; Editing by Biju Dwarakanath)