The BSE Sensex fell on Wednesday, snapping a two-day rise as mobile carrier stocks dropped on worries about the impact from the entry of a unit of Reliance Industries into the sector, although drug makers gained on hopes for improved U.S. sales.
Profit-taking also hit shares after domestic indexes closed at their highest in five months on Tuesday, with global shares also slipping from multi-month highs as investors weighed whether signs of progress in the euro zone debt crisis warranted the recent surge.
Foreign liquidity flows have played a big role in supporting Indian shares since the start of July, with cumulative net purchases of around $3 billion) bringing their total for the year to around $10.5 billion.
The flows have come even as the government has yet to announce any fiscal reforms, although investors still widely expect some measures.
"Some profit-booking in short-term in not ruled out, given we have risen too much," said Deven Choksey, managing director of K. R. Choksey Securities
"Government is moving in the right direction with talks of disinvestment and fuel subsidies. Decision are delayed but government is definitely on the job.
0.21 percent to end at 17,846.86 points. The Nifty fell 0.15 percent to end at 5,412.85 points. Both indexes posted their highest close since March 14 on Tuesday.
Trading volumes in the more widely traded NSE index hit their lowest since August 2 as one million bank employees began a two-day strike on Wednesday to protest against reforms that will give investors more clout in the tightly controlled sector.
Other mobile carriers also fell, with Reliance Communications
Recent outperformers declined: housing finance company HDFC
However, among gainers Ranbaxy Laboratories
Cox & Kings Ltd