Mumbai: Indian shares extended losses to more than 1% on Tuesday afternoon, weighed down by uncertainties about next Monday’s federal budget.
Reliance Industries dropped 2.3% and ICICI Bank fell 3% as investors took profits.
At 12:31pm, the 30-share BSE Index was down 1.01% at 14,636.45 points with 20 components losing. It had risen as much as 0.8% in early trade.
The 50-share NSE Index was down 1.18% at 4,339.15 points.
The Sensex seesawed in mid-morning as a rally in global markets failed to lift investor sentiment.
The market rose last week on expectations that the budget on 6 July will unveil pro-market reforms, but caution is setting in, with investors now booking profits and refraining from taking long positions, dealers said.
”The market has risen quite a lot in the last three, four months. Though everyone expects a lot from the budget, they are not sure whether those expectations will be met,” said D D Sharma, vice president, Anand Rathi Securities.
By 10:52am, the 30-share BSE Index was trading down 0.07% at 14,775.36 points, with gainers and losers equally split. The 50-share NSE Index was down 0.11% at 4,386.30 points.
Firm global markets helped a positive opening in Indian shares with the index rising as much as 0.8%, but the momentum could not be sustained.
Investor sentiment was also hurt by data showing India’s infrastructure output rose 2.8% in May from a year earlier, slower than an upwardly revised 5% in April.
The index rose 1.7% last week, after having fallen 4.7% in the previous week. Prior to that, the market was on a 14-week gaining streak, during which it rose 83%.
In the broader market there were 1077 gainers to 920 losers on high volume of 199 million shares.
“Even if all the expectations from the budget are met, I do not see the NSE Index rising more than 200 to 300 points,” Sharma said.
Infrastructure and engineering firm Larsen & Toubro led the index gainers and was up 1.1% at Rs1,633.25.
Tata Steel and Housing Development Corp were also among the gainers. Tata Steel was up 2.5% at Rs407, while HDFC was up 1.05% at Rs2,396.90.
Shares in United Spirits, the world’s third largest spirits maker, were trading down 4.4% at Rs876.15, after about 12.9% of its equity changed hands in block deals in early trades.
Shares in Unitech, India’s No. 2 real estate developer were trading down 1.8% at Rs83.75. Its shares closed up 3.6% on Monday after sources told Reuters the company has got commitments to raise $575 million from institutions.