Sensex stares at fourth session of losses, ITC leads fall

MUMBAI (Reuters) - Indian shares headed for a fourth straight session of losses on Monday as cigarette maker ITC slumped over 6 percent in its biggest fall in nine months due to worries about a "sin" tax, while oil producers fell after OPEC left output targets unchanged.

Indexes hit their lowest since Nov. 18 as sentiment sours ahead of the U.S. Federal Reserve's meeting next week, where it is widely expected to raise rates for the first time in about a decade.

Still, analysts say India's proposed sales tax edged closer to approval on Friday after a government-appointed panel backed the lower rate and simpler structure that the opposition Congress party had demanded.

 

"It's being actively discussed so the markets expect progress on the GST front," said Deven Choksey, managing director at KR Choksey Securities.

The broader Nifty was down 0.29 percent at 0732 GMT, while the benchmark BSE Sensex fell 0.48 percent.

ITC shares tumbled as much as 6 percent, their biggest single-day percentage fall since March 2, after the government appointed-panel recommended a "sin" tax of 40 percent on luxury cars, aerated beverages, paan masala, and tobacco and tobacco products.

The tax was part of the recommendations on GST issued on Friday.

Among other losers, resources stocks were trading lower as crude oil prices fell on Monday after OPEC failed to agree on output targets to reduce a bulging glut.

Reliance Industries Ltd dropped 1.23 percent, ONGC fell 1.8 percent and Cairn India declined 3 percent.

But GMR Infra shares gained 5.8 percent on media reports that the GMR Group was in talks with PE firms for investment in its GMR Airports business.

(Reporting by Karen Rebelo in Mumbai; Editing by Subhranshu Sahu)