Indian shares set to snap post-budget rally as banks weigh

BENGALURU, Feb 4 (Reuters) - Indian shares fell on Thursday as financial stocks took a breather after a three-day post-budget rally, with the focus pinned on the central bank’s monetary policy decision due on Friday where rates are expected to be held at record lows.

The NSE Nifty 50 index fell 0.25% to 14,753.10 by 0455 GMT, while the benchmark S&P BSE Sensex was down 0.34% at 50,084.71. Both the indexes hit record highs this week on euphoria surrounding a high-spending federal budget aimed at reviving a pandemic-hit economy.

“The recent rise was far too quick and we are seeing a consolidation at the moment,” said Anand James, chief market strategist at Geojit Financial Services in Kochi.

“With the budget behind us... and even though rates are expected to be held, there is an eye on some announcements coming up in the monetary policy committee meeting and that is partly why markets are cautious,” James said.

Cues from broader Asian shares were weak too, as tight liquidity conditions in China curbed buying.

Among individual shares and sectors, oil-to-telecoms conglomerate Reliance Industries declined as much as 0.9% after it said its unit will sell some Marcellus shale assets in the United States for $250 million.

Bank stocks were among the top drags on the Nifty 50, with top private-sector lender HDFC Bank falling 2%. The lender also weighed on the Nifty Bank index, which shed 1.5%. The index has risen 12.3% so far this week.

India’s largest lender SBI fell 1.1%, while Hero MotoCorp jumped nearly 4%. Both the companies will report their quarterly earnings later in the day.

The Nifty Auto index gained 2.2%, driven by a near 6% jump in Mahindra and Mahindra, followed by a 2.2% rise in Maruti Suzuki India. The carmakers were also the top boosts to the Nifty 50. (Reporting by Philip George in Bengaluru; editing by Uttaresh.V)