Sensex snaps winning run, Reliance leads fall

By Prashant Mehra

NEW DELHI (Reuters) - Indian shares fell 4.81 percent on Wednesday, snapping a five-day winning run on heavy losses in Reliance Industries and as investors locked in gains on a surge that had lifted the market 40 percent off a three-year low.

Shares in Reliance, India's most valuable listed company, plunged 12.8 percent to 1,269.45 rupees, on foreign fund selling and concerns about its earnings after a paper reported it had shut five polyester and petrochemical plants near Mumbai.

"I don't think the five units contribute to a very large part of the company's sales, but it is for sure affecting sentiment. Also, we feel their refining margins will fall further," said R.K. Gupta, managing director at Taurus Mutual Fund.

Despite the fall, Reliance shares are still up 36.5 percent from an Oct. 27 low of 930 rupees, which was its weakest in more than two years.

Telecom stocks fell on concerns that a government move to charge more for radio spectrum may hurt earnings. Sector leaders Bharti Airtel and Reliance Communication fell 4.5 percent and 9.5 percent respectively.

State Bank of India fell 3.6 percent, and rival ICICI Bank lost 1.6 percent, trimming gains made since the central bank cut its key lending rate and banks' reserve requirement at the weekend.

The 30-share benchmark index lost 511.11 points to end at 10,120.01, its lowest close since Friday, with 27 components falling. Buoyed by gains in global markets and the U.S. presidential election, the market had risen nearly 3 percent in opening deals.

"The selling looks like profit booking after the rally in the past 4-5 days. Stocks in construction, realty, metals had seen a strong bounce back. There may be weakness for another 1-2 sessions," said Dipak Acharya, fund manager at Baroda Pioneer Asset Management Co.