Mumbai: Indian shares erased early gains of more than 1% and snapped a two-day rise on Tuesday, as investors turned cautious ahead of quarterly earnings parade and the release of the industrial production data.
Telecom stocks rallied after a new draft policy unveiled by the government was seen broadly positive for the once-booming sector that has struggled in recent years due to ferocious competition and a massive graft scandal.
The main 30-share BSE index ended down 0.13% at 16,536.47 points, after having risen as much as 1.3% early. Sixteen of the index components ended in the positive territory.
“The market is a little cautious ahead of the start of the results season. The overall sentiment is not very positive, so investors also booked some profits after last two days’ gains,” said Kaushik Dani, a fund manager with Peerless Mutual Fund.
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Bharti Airtel Ltd rose 3.2% to Rs 375; Reliance Communications Ltd ended 0.1% higher and Idea Cellular Ltd climbed 3.5%.
The draft policy released on Monday proposes to let cellular carriers share, pool and trade radio airwaves and allow for consolidation in the crowded 15-player industry.
It was silent on details for future mergers and acquisition rules and on key issues such as pricing of second-generation spectrum, a proposed one-time levy on mobile firms for additional spectrum they already hold and proposed re-farming of spectrum at the time of licence renewal.
Lenders were mixed ahead of the industrial output data, which would provide cues on the central bank’s stance at its policy meeting on 25 October. The data is due at 11am on Wednesday. Industrial output probably grew 5% in August from a year earlier, on a favourable statistical base effect, despite successive interest rate rises slackening the pace of growth, a Reuters poll showed.
ICICI Bank Ltd fell 1.2%, while State Bank of India and HDFC Bank Ltd rose 0.5% and 0.6%, respectively.
The 50-share NSE index lost 0.1% to 4,974.35 points. In the broader market, gainers were ahead of losers in the ratio of 1.4:1 on relatively heavy volume of 634.9 million shares.