The BSE Sensex fell for a fourth session on Wednesday as Hindustan Unilever was hit by worries over higher royalty payments, but non-banking financials rose after the government reached an agreement with the opposition on a banking amendment bill.
Trading was cautious, a day after Standard & Poor's reiterated its warning that India faces a one-in-three chance of being downgraded to "junk" status over the next 24 months.
Data showed industrial output rose a stronger-than-expected 8.2 per cent in October but it failed to bolster investor sentiment, as analysts doubted if the growth rate could be sustained.
Traders are awaiting the US Federal Reserve's policy meeting later on Wednesday amid expectations for a new round of bond buying, while domestically, inflation data on Friday is watched for direction.
The benchmark BSE index fell 0.16 per cent, or 31.88 points to end at 19,355.26 points. The index has lost 0.7 per cent over the past four sessions.
The broader NSE index fell 0.18 per cent, or 10.80 points, to end at 5,888 points.
Hindustan Unilever was among the leading decliners, ending the day down 2.8 per cent, following news that Unilever’s Indonesian subsidiary had agreed to pay a higher royalty payment to Unilever Plc.
That raised worries of Hindustan Unilever also having to make a higher payment to its parent company. Hindustan Unilever did not immediately respond to an email sent by Reuters.
Mortgage lender HDFC fell 1.7 per cent on profit-taking after gaining 4.44 per cent in previous two sessions. HDFC shares have outperformed the index, gaining 14.8 per cent since November, a month considered auspicious for buying homes. NMDC shares fell 3.3 per cent to Rs 154.30, as the government was in the process of selling up to $1.1 billion stake in the state-run miner, at an indicative weighted average of Rs 149.23.
However, non-banking financial companies rose on hopes that Parliament will pass a banking amendment bill that would set the regulations required for opening the lending sector to outside companies.