BSE Sensex snaps 4-day rally; Reliance gains

By Ami Shah

MUMBAI (Reuters) - The BSE Sensex snapped a four-day winning streak and fell 0.35 percent on Tuesday, weighed down by telecom stocks that dropped on a bleak outlook for the sector due to growing competition and a price war.

The market had initially rallied more than 1 percent, adding to gains of 7.1 percent in the past four days, but met with resistance on concerns the rise was too fast against uncertainties about outlook.

Reliance Industries rallied as much as 3.7 percent after the energy major announced its first oil find in a western Indian block, boosting hopes the firm's oil and gas exploration business will help offset some of the weakness in the refining sector.

The stock, with the most weight in the main index, ended up 1.4 percent at 2,052.60.

Bharti Airtel, the country's leading mobile operator, fell 4.5 percent to 293.75 rupees, while rival Reliance Communications shed 2.9 percent to 169.05 rupees.

JPMorgan cut its earnings estimates and share price targets for the sector companies and said it did not see a bottom yet.

"We believe that the fundamental issue for the sector remains overcompetition and high capital expenditure over last 2-3 years leading to empty network for several players," it said in a note.

The 30-share BSE index closed down 58.16 points at 16,440.56 after rising as high as 16,677.53 in the morning. Twenty-two of its components declined.