Telecom stocks on Wednesday surged as much as four per cent after government allowed 100 per cent FDI but the euphoria did not last long as investors booked profits washing out all gains.
At the close of trade, telecom stocks ended with as much as 4.3 per cent loss.
Shares of Idea Cellular tanked 4.26 per cent to Rs 150.75 on the BSE. Intra-day, the scrip had touched its record high of Rs 163.50.
After touching its 52-week high earlier, Reliance Communications fell 2.06 per cent to Rs 142.90.
Bharti Airtel too was down 1.68 per cent to Rs 315.85, after notching up nearly 2 per cent rise intra-day.
"Telecom shares erased early gains due to profit booking," said CNI Research CMD Kishor Ostwal.
Telecom shares, which were in the spotlight for the last couple of days, saw huge profit-booking, said brokerage India Infoline.
However, state-run MTNL closed nearly 3 per cent higher.
On Tuesday, the government allowed 100 per cent FDI in the telecom sector, meeting a key demand of the fund-starved industry.
Earlier, FDI limit in the sector was 74 per cent where 49 per cent was done through automatic route and rest required nod from Foreign Investment Promotion Board.
The idea behind the decision to increase FDI limit in telecom sector is to help the industry get fresh funds to lower financial burden.
The move also brings relief for foreign partners in telecom companies as they can have complete ownership of the business.