Sensex, Nifty Erase Gains After Hitting Record Highs

( – Indian shares fell on Wednesday on the back of selling in metal, banking and IT stocks as investors locked in some profits at higher levels, awaiting cues from a European Central Bank meeting on Thursday and the all-important U.S. jobs report due out Friday, which could provide some clues about the timing of the Federal Reserve’s interest rate hike this year. While the major Asian markets ended mostly lower, European stocks fluctuated following a round of mixed economic reports from the eurozone.

Closer home, the key benchmark indexes hit fresh record highs early in the session after the Reserve Bank of India cut its key policy (repo) rate by 25 basis points, encouraged by softening inflation and fiscal consolidation roadmap laid out by the government in the Union Budget.

Delivering its second interest rate cut this year, the central bank noted that the government has emphasized its desire to clean up legacy issues which gave a misleading picture of the true extent of fiscal rectitude. A private survey indicated strong expansion in India’s services sector output in February, further buoying investor sentiment.

However, the euphoria faded soon after stocks hit record highs. The BSE Sensex jumped as much as 1.46 percent to reach a record high of 30,024.74 before reversing direction to end the session down 213 points or 0.72 percent at 29,380.73.

The broader CNX Nifty index climbed as much as 1.37 percent to mark a record high of 9,119.20 before erasing all its gains to end the session down 73.60 points or 0.82 percent at 8,922.65.

The rupee also hit a one-month high before surrendering early gains as RBI Governor Raghuram Rajan cautioned a very strong currency against the dollar was not desirable.

Metal stocks came under selling pressure as the government began the second phase of coal mine auctions by putting on offer four blocks. Sesa Sterlite tumbled 4.1 percent, Hindalco dropped 3.3 percent, Coal India declined 1.9 percent and Tata Steel fell 1.6 percent.

Banks reversed early gains, with HDFC Bank, SBI and Axis Bank falling 2-3 percent. IT stocks also closed on a downbeat note, with Infosys, TCS and Wipro losing 1-2 percent. Adani Ports & Special Economic zone dropped 1.2 percent on the buzz it is mulling acquiring Essar Group’s ports business.

IIFL Holdings plummeted 5.8 percent after the Economic Offences Wing of Mumbai police arrested a senior official of its commodities broking subsidiary for allegedly being involved in the Rs 5,600 crore National Spot Exchange (NSEL) scam.

Sun Pharma soared 6.6 percent after its subsidiary Sun Pharma Advanced Research Company received USFDA approval for an anti-epileptic drug. ITC rose 0.9 percent as bargain hunters stepped in following recent steep losses.

Bharti Airtel gained 0.6 percent. The telecom major has announced a strategic collaboration with China Mobile for jointly sourcing devices and equipment as well as developing 4G technology and standards.

Realty firm Nitesh Estates soared 20 percent on a report Goldman Sachs will invest $ 300 million (Rs 1,850 crore) in a joint venture company floated by the company. Thomas Cook India shares climbed 7.6 percent after the company said it has created Travel Quest, a dedicated student travel vertical with its intent to focus on India’s emerging student segment.

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