Indian shares extend fall; RBI decision in focus

Bengaluru

Indian shares edged down on Tuesday and were headed for a third straight session of fall amid caution ahead of the central bank's policy decision on Wednesday.

Sentiment was also hurt after a survey showed services activity in May shrank for the first time in three months as new orders stagnated.

The Nikkei/IHS Markit Services Purchasing Managers' Index fell to 49.6 in May, sinking below the 50-mark that separates growth from contraction.

“Services PMI data came in below 50, which means export-led industries will show some decelerating growth,” said Anita Gandhi, whole time director at Arihant Capital Markets Ltd.

Meanwhile, investors wait to see whether the central bank will raise interest rates for the first time since January 2014.

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The broader NSE index was down 0.27 % at 10,600.30 as of 0701 GMT and the benchmark BSE index was 0.18 % lower at 34,948.53.

Larsen & Toubro (L&T) and Infosys Ltd accounted for majority of the losses on both indexes. L&T fell nearly 2 %, while Infosys declined 1.3 %.

Reliance Communications Ltd fell as much as 6 % after the company said it would not pay interest on its non-convertible debentures until its restructuring process is over.

Among gainers, Biocon Ltd rose 6.4 % to a record high after the drugmakers's partner Mylan NV said the U.S. Food and Drug Administration approved its biosimilar to Amgen Inc's Neulasta.

Shares of sugar companies also climbed following reports that the government would announce a bailout package of over 70 billion rupees ($1.04 billion) for cash-starved sugar mills to help clear dues to farmers.