Indian shares fell 0.4 percent on Wednesday, snapping a two-day rally that sent them up more than 3 percent, with investors wary ahead of quarterly corporate results that will begin next week amid slowing economic growth and high interest rates. A series of rate rises since early 2010 to combat inflation, a weak rupee and sluggish consumer spending are likely to weigh on the results of many companies, while concerns remain about the impact of the eurozone debt crisis on the global economy.
Consumer goods maker Hindustan Unilever Ltd's shares were among the biggest losers and closed 3.1 percent lower at 395.45 rupees, its lowest closing level in nearly three weeks. Brokerage CLSA downgraded the company to "sell" from "under-perform," citing a sharp rise in input costs and a weak macro environment that could hurt pricing power.
The main 30-share BSE index ended down 0.36 percent or 56.72 points at 15,882.64, with 18 of its components in the red. It rose 0.2 percent in opening deals and later fell as much as 0.7 percent. The broader 50-share NSE index ended down 0.33 percent at 4,749.65 points. In the broader market, gainers were ahead of losers in the ratio of 1.2:1 on strong volume of more than 567 million shares.
Infosys Ltd, India's No 2 software exporter, starts the earnings parade on January 12, followed by index heavyweights Larsen & Toubro Ltd and Reliance Industries Ltd. Reliance Industries fell 1.2 percent to 716.15 rupees on profit booking by institutional investors.