BENGALURU, Feb 1 Reuters Indian shares reversed earlier gains to close lower on Wednesday, led by a fall in insurance companies after the country39;s Union budget proposed to limit tax exemptions for insurance proceeds, while Adani Group shares tumbled.

The Nifty 50 index fell 0.26 to close at 17,616.30, while the SP BSE Sensex rose 0.3 to 59,708.08.

This was the worst budget day performance by Nifty 50 in three years, since the 2.51 fall in 2020.

Meanwhile, Indian bond yields dropped after the government announced gross borrowing at 15.43 trillion rupees 188.75 billion for the next financial year. A Reuters poll had pegged gross borrowing at 16 trillion rupees.

The benchmark bond yield was at 7.2774, dropping 11 basis points from the days high, while the Indian rupee was largely unchanged against the dollar.

The benchmark stock indexes rose as much as 2 after Finance Minister Nirmala Sitharaman raised the rebate limit for personal income tax to 700,000 rupees from 500,000 rupees.

But they reversed gains after Sitharaman also proposed a tax on the total returns upon maturity of life insurance policies except ULIPs issued on or after April 1, 2023, if the aggregate premium of such policies is more than 500,000 rupees a year.

The move is overall a negative for insurance companies as it will impact the highvalue premium policies thus impacting overall industry gross written premium growth, said Arihant Bardia, Co Founder, Valtrust, an investment management company….