Indian shares slipped on Thursday after four straight sessions of gains, as investors booked profits in oil refiners amid a lack of fresh triggers after the central bank kept rates unchanged in a move that was widely expected.
The Reserve Bank of India held its policy rate steady near seven-year lows on Wednesday after inflation surged, but looked to prop up the cooling economy by spurring banks into lending more.
The lack of monetary stimulus will leave it to the government to try to boost an economy that unexpectedly expanded at its slowest pace in more than three years in the April-June quarter, sparking talk that New Delhi is considering increasing spending and widening its fiscal deficit target.
"Until there is some trigger, markets will oscillate within a narrow range," said Jayant Manglik, president, retail distribution, Religare Securities, adding that the bias would be downward as investors feel it is a bit risky to enter the market at higher levels.
The broader NSE Nifty was down 0.18 percent at 9,896.85 as of 0650 GMT, while the benchmark BSE Sensex was 0.17 percent lower at 31,618.85.
Oil refiners fell on profit-booking, said analysts. Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd declined over 2 percent each after three consecutive sessions of gains.
Investors also booked profits in stocks such as Bharti Infratel Ltd, which declined as much as 3.2 percent, and Tech Mahindra Ltd, which was down over 2 percent. Both stocks had gained in the last five sessions.
Among gainers, Prataap Snacks Ltd rose as much as 40.6 percent to 1,318.80 rupees on its trading debut, compared with its initial public offering price of 938 rupees.
Mahindra & Mahindra Ltd jumped as much as 2.1 percent after state-run Energy Efficiency Services Ltd said it would buy 150 e-vehicles from the automaker in phase I of a plan to buy a total of 10,000 e-vehicles.