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India shares post first fall in five days as Jio offer rattles telecom stocks

MUMBAI (NewsRise) -- Indian shares fell for the first time in five sessions on Thursday, reversing early gains, as telecom stocks dropped after billionaire Mukesh Ambani's Reliance Jio extended its free voice and data services until March end.

The benchmark BSE Sensex lost 0.4%, ending at 26,559.92 points. It had gained 0.4% in initial trading helped by positive global cues after the Organization of the Petroleum Exporting Countries agreed to cut oil output by 1.2 million barrels a day. The index had jumped 3.1% in the previous four sessions. The broader NSE Nifty50 index declined 0.4% to 8,192.90 points.

India's economy grew slower than expected at 7.3% from a year earlier in July-September, weighed by slowing manufacturing growth, government data released after market hours on Wednesday showed.

India's biggest mobile phone operator Bharti Airtel, banks, and most auto stocks were among the top losers, while Reliance Industries, Oil & Natural Gas Corp. and mortgage lender Housing Development Finance Corporation were the top performing stocks.

Fifteen of the 30 index constituents finished higher, while overall declining stocks beat advancing ones by 1,562 to 1,118, with 136 issues unchanged.

"Telecom stocks came under tremendous pressure following the Jio announcement and that pulled the indexes lower," said Akash Jain, Vice President of Research, at Ajcon Global. "Banks, led by ICICI Bank, also featured among losers, as traders chose to book profits on yesterday's gains."

The BSE telecom index fell 1%, with Bharti Airtel ending down 1.7% to 319.10 rupees and rival Idea Cellular finishing 5.9% lower at 72.95 rupees.

Increasing competition from cash-rich Reliance Industries' telecom venture is likely to put rivals under tremendous pressure in coming months. Reliance Jio started its services in September and has already added more than 50 million users.

Among other major losers, top private lender ICICI Bank lost 2.1% at 259.35 rupees, while Tata Motors, owner of British premium car maker Jaguar Land Rover, fell 2.4% to 448.15 rupees.

Asian Paints fell 3.2% to 939.05 rupees, marking its biggest single-session loss in over two weeks. An overnight surge in crude oil prices weighed on the stock as the company uses crude-related products to manufacture paints.

Refiners rose after an overnight rally of over 9% in crude oil prices following the OPEC's agreement for its first production cut in eight years. Reliance Industries rose 0.5% to 997.20 rupees and state-run ONGC gained 1.1% to 292.20 rupees.

Maruti Suzuki India, the nation's largest carmaker, ended 0.3% lower at 5,249.25 rupees, despite posting 12.2% on-year growth in November vehicle sales. Sports utility vehicle and tractor maker Mahindra & Mahindra fell 2.2% to 1,159.95 rupees, after its November sales declined 22% on-year weighed by a 33% drop in passenger vehicle sales.

"The sudden announcement of demonetization has brought in an immediate disruption and uncertainty," said Pravin Shah, president and chief executive of Mahindra's automotive division said in a statement. "While it is a good and welcome step in the mid to long term, this has dampened overall sentiments leading to postponed buying thereby resulting in a major drop in volume in November."

Mortgage-lender HFDC gained 0.7% to 1,269.95 rupees on value buying by local funds, dealers said. The stock has seen significant value erosion following the government's demonetization move that hurt the scope of property deals and slowed demand for home loans.

"We may see a delay in revival of earnings for the next two quarters owing to the demonetization drive," Ajcon Global's Jain said. "The trend for the next week will be determined by the Reserve Bank of India's Dec. 7 policy outcome."

In Asia, Hong Kong's Hang Seng rose 0.4%, while Japan's Nikkei 225 index ended 1.1% higher. South Korea's Kospi ended flat, while China's Shanghai Composite was up 0.7%.

-- Dhanya Ann Thoppil

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