* Mkt talk govt may roll back tax cuts unnerves investors
* ACC, Ambuja, Tata Steel, JSW Steel among major losers
* Reliance falls 4th day after unfavourable gas supply
ruling
* L&T, ONGC drop on profit-taking; Infosys bucks trend
(Updates to close)
By Pratish Narayanan
MUMBAI, June 18 (Reuters) - Indian shares fell 1.8 percent
on Thursday, dropping for the fifth session in six, as
profit-taking picked up momentum on market talk the
cash-strapped government may roll back tax breaks for some
sectors.
The ruling coalition, which was re-elected with a stronger
mandate in May, is scheduled to present its annual budget on
July 6. The victory had initially sparked expectations the
government would pursue investor-friendly measures to boost
growth.
"Investors are worried the budget won't bring the pleasant
tidings they thought it will," Arun Kejriwal, a strategist at
research firm KRIS, said.
"People are realising all the expectations from the budget
could turn out to be hogwash."
Tata Steel (TISC.BO) and JSW Steel (JSTL.BO), and cement
makers ACC Ltd (ACC.BO) and Ambuja Cements (ABUJ.BO) were
hammered on speculation the government may roll back excise
duty cuts announced in February to boost demand, traders said.
Energy giant Reliance Industries (RELI.BO) extended losses
for a fourth session, falling as much as 2.9 percent, following
an unfavourable court ruling on gas supplies. [ID:nBOM433343]
Profit-takers also targeted engineering and construction
firm Larsen & Toubro (LART.BO) and state-run explorer Oil and
Gas Natural Corp (ONGC.BO).
The 30-share BSE index .BSESN ended down 1.77 percent, or
257.31 points, at 14,265.53, after falling as much as 2.3
percent and rising 0.7 percent at one stage. It was the lowest
close in three weeks.
The benchmark has dropped 5.4 percent since last Wednesday
after soaring 77.3 percent from a 2009 low in early March, and
traders said the pull back was a healthy sign for the longer
run.
"Whatever correction is happening is for the good because
the market was on a one-way ticket to the moon," V.K. Sharma,
head of research at Anagram Stock Broking, said.
The long-term outlook for the market remains firmly upbeat,
he said. "Those with a one-year horizon, should be buying on
these dips."
Outsourcer Infosys Technologies (INFY.BO) rose 0.6 percent
to 1,721.45 rupees, while government-run lender State Bank of
India (SBI.BO) gained 2.3 percent to 1,702.20 rupees.
India's wholesale price index fell in early June on an
annual basis for the first time in at least three decades, but
analysts said this did not signal a weakening economy and would
not prod the central bank to cut rates further. [ID:nBOM128873]
Twenty-three components in the main index declined, while
in the broader market, losers led gainers by almost 4 to 1 on
relatively heavy volume of 508.8 million shares.
Reliance slid 1.3 percent to 2,024.95 rupees, extending
losses over four sessions to 14 percent.
Larsen fell 3.5 percent to 1,415.30 rupees, while ONGC
dropped 4.9 percent to 1,012.40 rupees.
ACC slumped 8.3 percent to 758.35 rupees, while Ambuja shed
6.8 percent to 89.60 rupees. Tata Steel ended down 6.7 percent
at 389 rupees and JSW Steel dropped 9.3 percent to 573.45
rupees.
The 50-share NSE index fell 2.4 percent to
4,251.40.
MAIN TOP 3 BY VOLUME
* Jaiprakash Associates (JAIA.BO) on 42.3 million shares
* Unitech (UNTE.BO) on 28.3 million shares
* Satyam Computer (SATY.BO) on 24.4 million shares
STOCKS THAT MOVED
* Shipbuilder ABG Shipyard (ABGS.BO) slid 9.4 percent to
186.70 rupees after a senior official said the company does not
see fresh orders in 2009 due to a slowdown in demand.
[ID:nBOM453020]
* Hotel Leelaventure (HTLE.BO) fell 7.55 percent to 30.60
rupees on concerns lower room tariff may affect profits. Hotel
Leela has been cutting rates at key city business properties to
offset lower occupancy levels.
FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee drops as stx fall over 2 pct; dlr rises
[INR/]
* Indian bond yields edge up; buyback results eyed
[IN/]
* Swiss franc up after SNB comments; dlr creeps up
[FRX/]
* Oil moves higher above $71 on falling inventories [O/R]
* World stocks stabilise near 3-week low [MKTS/GLOB]
* U.S. stock index futures mixed; eyes on banks
[.N] * For closing rates of Indian ADRs
INADR (Editing by Ranjit Gangadharan)
