Reuters

Mumbai

Indian shares fell yesterday, retreating from their record closing highs in the previous session as exporters including IT companies such as Tata Consultancy Services dropped amid concerns about the impact of a stronger rupee.

Exporters were among the top decliners in the rally in anticipation of Narendra Modi’s victory in general elections last month, as investors preferred domestic-oriented stocks that would benefit from a revival in the economy.

Investors expect some consolidation ahead of the new government’s budget, due to be unveiled by early or mid-July.

“After such a great rally, profit-booking is a must in the short term. But India is still in a sweet spot. Expect lot of triggers from the government,” said G Chokkalingam, founder of research and fund advisory company Equinomics.

The benchmark BSE index fell 0.21%, or 52.76 points, to end at 24,805.83, retreating from its record closing high hit on Tuesday. The broader NSE index dropped 0.18%, or 13.60 points, to end at 7,402.25, just managing to close above the psychologically important 7,400 level.

Software stocks fell on continued concerns about the stronger rupee. The local currency has gained around 4% so far this year and is among the best performers in Asia. Tata Consultancy Services fell 1.9%, Infosys ended lower 1.1% and HCL Technologies lost 3%. Among pharmaceutical exporters, Sun Pharmaceutical Industries fell 1.2% while Dr Reddy’s Laboratories lost 0.8%.

Reliance Industries fell 1.6% after JPMorgan downgraded the stock to “neutral” from “overweight”, saying share prices already reflect positive catalysts even as fundamentals remain on “a solid footing”.

Bharti Airtel fell 1.8%, adding to Tuesday’s 0.4% decline on profit-taking after surging 5.1% on Monday. However, among stocks that gained, fertilizer companies surged on hopes that the new government will soon clear its 2013/14 outstanding subsidy payments for the sector, dealers said.