Indian shares fell for the first time in five sessions on Tuesday as investors turned cautious ahead of the earring's season.
The 30-issue Mumbai share index fell 1.6 percent to 5,943.64 points, after an intra-day swing of 205 points. At the day's peak, the marker was barely 30 points short of its historic intra-day peak of 6,150.69 points struck in February 2000.
The index had ended at an all time closing high of 6,039 points on Monday.
"Expectations are very high," said Ambareesh Baliga, head of equities at Karvy Stock-brooking. "But if the fall continues to beyond eight percent from here, panic could set in."
Indian stocks have been making heady gains as investors splurged ahead of the quarterly earnings season due to kick off later this week. Investors expect companies to report strong numbers in one of the world's fastest growing economies.
The Bombay index rallied about 73 percent in 2003, making it Asia's second-best performer.
India's economy, Asia's third-largest, grew at an unexpectedly robust 8.4 percent during the third quarter of 2003, and analysts expect the economy to grow at more than seven percent in the fiscal year to March 2004.
Technology, cement and metal stocks, which had led the recent rally, led Tuesday's decline as investors consolidated holdings.
Infosys Technologies, the nation's No 2 software services exporter, dropped 4.03 percent to 5,654.65 rupees. It will be the first index heavyweight to report its October-December performance.
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