MUMBAI (NewsRise) -- Indian shares fell Tuesday, retreating from two-year highs, as investors took profits in select index heavyweights, while awaiting results of elections in the northern state of Uttar Pradesh.
The benchmark BSE Sensex declined 0.2%, or 48.63 points, to 28,999.56 after trading in a narrow range, while the broader NSE Nifty 50 index ended 0.2% lower, or 16.55 points, at 8,946.90. Both the indices had hit their highest levels since March 2015 in initial trade, supported by firm regional cues and rising bets that Prime Minister Narendra Modi's Bharatiya Janata Party may secure victory in U.P. polls.
Election results in U.P., India's most populous state, and other four states are due on Saturday. A victory by the ruling BJP would boost Modi's chances of securing a second consecutive five-year term in the national elections in 2019.
Investors are also in a wait-and-watch mode ahead of the U.S. Federal Reserve's meeting next week, amid mounting expectations of an interest rate increase.
"Today's movement is a combination of factors including profit booking and state election results on this Saturday," said G. Chokkalingam, managing director at Equinomics Research & Advisory. "Valuations look stretched at these levels."
Twenty one of the 30 Sensex constituents ended lower, while overall on the BSE, declining issues beat advancing ones 1,687 to 1,156 and 166 issues were unchanged.
Software exporter Infosys fell 1.4% to 1,019.70 amid persistent concerns related to work visa issues in the U.S, the outsourcing industry's largest market.
According to media reports, the U.S would temporarily suspend the 'premium processing' of H-1B visas, effective Apr. 3.
Metal shares that were among the best performers last year went through some consolidation. Tata Steel declined 2.2% to 482 rupees, while aluminium and copper producer Hindalco Industries finished 3.5% lower at 192.50 rupees.
Tata Consultancy Services, India's biggest company by market value, gained 1.2% to 2,500.70 rupees as local funds stepped up purchases, dealers said.
State-owned Oil & Natural Gas Corp. rose 1.3% to 196.25 rupees. According to a media report on Tuesday, the petroleum ministry has ordered a review of the company's board of directors in relation to an investigation into slowdown in development of discovered oilfields Ratna and R-Series.
Tech Mahindra, part of the Nifty index, ended up 0.1% at 499.80 rupees after the company said late Monday it proposed to acquire 84.7% in U.S. based CJS Solutions Group for $89.5 million.
Elsewhere in Asia, Japan's Nikkei 225 index ended down 0.2%, while Hong Kong's Hang Seng gained 0.4%. China's Shanghai Composite index rose 0.3% and South Korea's Kospi index ended 0.6% higher.
--Dhanya Ann Thoppil