Reliance, Financials Drag Stocks Into Red Ahead Of GDP Data

Indian shares fell on Wednesday, snapping a four-day winning streak, dragged by index heavyweight Reliance Industries and financial stocks, ahead of gross domestic product data for the March quarter due later in the day.

The blue-chip Nifty 50 index lost 0.53 per cent to 18,534.40, while the benchmark S&P BSE Sensex closed 0.55 per cent lower at 62,622.24.

Both indexes had hit new five-month highs for three sessions in a row and were in overbought territory before Wednesday's slide.

Reliance Industries, India's largest firm by market capitalisation with a 10.32 per cent weightage in Nifty 50, lost 2 per cent.

The oil-to-telecom conglomerate could see USD 155 million in outflows, following a decrease in its MSCI weightage, according to Nuvama Research. The MSCI index rejig comes into effect post-market close on Wednesday.

Six of the 13 major sectoral indexes logged losses, with the high-weightage financials falling 0.82 per cent. India's largest state-owned lender, State Bank of India lost 2.18 per cent on its record date for dividends.

Investors awaited a vote on the US debt ceiling agreement deal, due on Wednesday. “Its outcome would determine the market direction in the near to medium term,” said Shrikant Chouhan, head of equity research (retail) at Kotak Securities.

While the deal is expected to pass, uncertainty prevailed about whether the U.S. Congress will approve it after some Republican lawmakers vowed to stall it.

Investors also await India's gross domestic product (GDP) data for the quarter ending 31 March. A Reuters poll of economists estimated the economy grew by 5 per cent, accelerating from 4.5 per cent in the previous quarter, aided by steady urban demand and government spending.

Bucking the trend was pharma, which gained 0.6 per cent, led by a rise in Sun Pharmaceutical Industries on Chinese nod for plaque psoriasis drug and Torrent Pharmaceuticals on strong March quarter earnings.