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By Derek Francis
BENGALURU - Indian shares inched lower on Wednesday after three straight sessions of gains, tracking broader Asia as investors worried about Washington's tough stance on the trade talks with China, and as a slump in domestic automobile sales curbed risk appetite.
U.S. President Donald Trump said on Tuesday he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees again to four or five "major points" that he did not specify.
Meanwhile, weak demand and a liquidity crisis at India's shadow banks put the brakes on automobile sales in the domestic market, with passenger vehicle sales in May declining over 20%, data from the Society of Indian Automobile Manufacturers showed.
The broader Nifty fell 0.35% to 11,924.15 as of 0518 GMT, while the benchmark Sensex was down 0.37% at 39,802.41.
"Auto companies, which were in the limelight, are experiencing slowdown in demand. This is definitely going to impact their profitability and will impact the market," said KK Mittal, an investment advisor at Venus India Asset Management.
"Even tractor sales and commercial vehicle sales have come down, especially in the monsoon months. This will have an effect."
The Nifty auto index was 0.3% lower, dragged by Bajaj Auto Ltd and Hero MotoCorp Ltd, which were down about 1% each.
Yes Bank Ltd fell 2.7% and dragged the Nifty Bank index lower by about 0.5%, after ratings agency Moody's put the bank's rating "under review."
Indiabulls Housing Finance Ltd continued its bear run, falling 5% and topping the NSE losers list, after being dragged into an embezzlement lawsuit on Monday.
Among gainers, Vedanta Ltd rose 1.6% to the top of the NSE list on optimism from higher copper prices. The Nifty metals index was up 0.9%.
(Reporting by Derek Francis in Bengaluru; Editing by Subhranshu Sahu)