Indian stocks end lower as metals, energy stocks drag

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A road sign is seen next to Bombay Stock Exchange (BSE) building in Mumbai, India, February 6, 2018. REUTERS/Danish Siddiqui

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BENGALURU, Oct 20 (Reuters) - Indian shares ended lower on Wednesday, dragged by metals and energy stocks on weaker commodities, while investors also turned cautious after a red-hot rally by the benchmark indexes over the past few sessions.

The NSE Nifty 50 index (.NSEI) fell 0.8% at 18,266.60, while the S&P BSE Sensex (.BSESN) dropped 0.7% at 61,259.96. The Nifty and the Sensex have risen more than 3% and 4%, respectively, in the past week.

"This is a sort of profit-booking, which the market was waiting for. The 1,000-point rally to 18,000 level was touched within a short period. Valuations are on the higher end too," said Likhita Chepa, senior research analyst at Capitalvia Global Research.

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UBS analysts said in a note that Indian equities looked unattractive, especially on expensive valuations and fading earnings momentum.

Nifty metals (.NIFTYMET) and energy stocks (.NIFTYENR) were among the big losers, falling 2.1% and 1.6%, respectively. Hindalco Industries (HALC.NS) was the top loser on the Nifty 50 index, falling 3.9%.

Industrial metals and oil prices declined on Wednesday, following a recent strong rally, after the Chinese government stepped up efforts to tame record high coal prices and ensure coal mines operate at full capacity. read more

Investors are also awaiting more September-quarter earnings from Indian corporates, analysts said.

Consumer giant Hindustan Unilever (HLL.NS) dropped 2.7% after it warned that margins could remain under pressure in the near term due to elevated commodity prices.

Chemical producer Navin Fluorine (NAFL.NS) slumped 9.3% and agriculture input maker Rallis India (RALL.NS) fell 7.1%, as both companies posted a quarterly profit drop.

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Reporting by Nallur Sethuraman in Bengaluru; Editing by Ramakrishnan M.

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