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Asia300

India shares fall as investors turn cautious before Fed policy

HDFC, Reliance lead the losses while Tata Motors jumps

MUMBAI (NewsRise) -- Indian shares edged lower on Tuesday after a subdued trading session, with the Nifty index retreating from a record as investors turned cautious ahead of the U.S. Federal Reserve's policy review.

The benchmark BSE Sensex declined 0.1%, or 21.39 points, to 32,402.37, while the broader Nifty 50 index closed 0.05% lower, or 5.55 points, at 10,147.55. Mortgage lender Housing Development Finance Corp. fell 1% and energy-to-telecom conglomerate Reliance Industries lost 0.6%.

"Investors are turning more cautious on account of the Federal Reserve's policy meeting," said Vinod Nair, head of research at Geojit Financial Services. "Also, the concern on valuations and a lack of supportive cues influenced investors to book some profits."

Most regional markets ended lower on Tuesday. Though market participants expect the Fed to hold rates steady at the two-day review, there is speculation that the authority may start scaling down its balance sheet from next month. The Nikkei Asia300 tracking influential companies out of Japan fell 0.3%.

Sixteen of the 30 Sensex constituents ended lower while overall declining issues edged past advancing ones 1,309 to 1,297 and 161 remained unchanged.

Tata Motors jumped 4.6% after Tata Group holding company Tata Sons reportedly bought a 1.71% stake in the auto maker for about 20 billion rupees ($311 million). The purchase was at a 4% premium to the Monday's closing price.

Stocks of gas companies were among the most actively traded on Tuesday after Morgan Stanley said the sector is on a growth path, supported by benign gas prices and favourable government policies. It expects earnings of most gas producers to rise more than 60% during 2017-20.

State-run Petronet LNG, Gail India and Gujarat Gas were Morgan Stanley's top buys. Petronet rose 1.2%, Gail advanced 4.9%, and Gujarat Gas finished 1.6% higher.

Pharmaceutical company Biocon added 0.6%. The United States Food and Drug Administration completed inspection of the company's facility in Visakhapatnam in southern India with no observations, the company said in a statement to stock exchanges.

Coal India declined 2.5%. The state-owned miner's subsidiary Mahanadi Coalfields may face penalty of over 200 billion rupees in the wake of a Supreme Court order that rendered illegal all mineral production violating environmental laws, The Economic Times newspaper reported.

Mahindra Lifespace Developers gained 3.6%. The infrastructure and real estate arm of the Mahindra Group has partnered with International Finance Corp. to develop industrial parks in three states. IFC has committed to invest $50 million initially.

Glenmark Pharmaceuticals ended 1.4% higher at 615.45 rupees after the company said it received the final U.S. FDA approval for generic skin ointment Desonide. Nomura raised its target price on the stock to 880 rupees from 856 rupees.

ICICI Bank closed 0.6% higher. Its subsidiary's ICICI Lombard General Insurance's 57 billion-rupee initial public offering was fully subscribed on the final day of order taking on Tuesday.

State Bank of India ended down 0.9%. The bank's subsidiary SBI Life Insurance Company's $1.3 billion IPO will open for order taking Wednesday.

--Nivedita Naidu

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