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Mumbai: Indian shares pared most of their losses yesterday after falling more than two per cent at one stage, but investors were jittery about the outlook with the government fighting to contain inflation.
Sentiment was also weighed down by concerns that some companies may have lost money in foreign exchange derivatives, traders said.
The 30-share BSE index ended down 0.11 per cent, or 17.82 points, at 15,626.62, with 16 components in the red. The benchmark rose as much as 1.2 per cent in early deals after falling 4.44 per cent on Monday, before dropping. It is down 23 per cent so far this year.
"Inflation is the biggest concern right now and there are expectations of a hike in cash reserve ratio which will tighten the monetary situation further," said Raj Bhandari, a director at Networth Stock Broking.
A survey showed manufacturing activity grew at its slowest pace in eight months in March, slipping further from its peak in December.
Larsen & Toubro fell 4.3 per cent to Rs2,894.75 and state-run Bharat Heavy Electricals dropped eight per cent to Rs1,891.85.
The broader 50-share NSE index rose 0.11 per cent to 4,739.55.
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