NEW DELHI (Reuters) – The BSE Sensex lost steam and turned down sharply after a strong open on Wednesday, with investors locking in some gains after the market had risen more than 40 percent from a three-year low hit last week. Reliance Industries led the losses after a newspaper reported it had shut five of its seven polyester and petrochemical plants near Mumbai, while telecom stocks fell on concerns that a government move to charge more for radio spectrum may impact their earnings. "I don't think the five units contribute to a very large part of the company's sales, but it is for sure affecting sentiment. Also, we feel their refining margins will fall further," said R.K. Gupta, managing director at Taurus Mutual Fund. "And the overall market, now that we have seen a sharp rise and also the rupee has strengthened, we expect another round of selling by the foreign funds." At 11:25 a.m., the 30-share benchmark index was down 2.67 percent, or 283.76 points, at 10,347.36 with 22 components falling. The market had opened 2.8 percent higher, buoyed by gains in global markets and Barack Obama's victory in the U.S. elections, but then fell to be down as much as 3.1 percent. At Wednesday's high, the market was up 42 percent from a three-year low of 7,697.39 hit on Oct. 27. Reliance Industries, India's top private sector firm and the biggest stock in the index, was down 8.3 percent at 1,335 rupees. At Tuesday's close, it had risen 56.5 percent from an Oct. 27 low of 930 rupees, which was its weakest in more than two years. A government spokesman told Reuters the government was due to increase fees telecoms firms pay for using additional spectrum by up to 2 percent of the firms' revenue, and would also levy a one-time charge for granting additional spectrum. Top mobile operator Bharti Airtel was down 3.2 percent, and Reliance Communications fell 6 percent on concerns the costs may see the firms raise tariffs. Leading banks ICICI Bank were down more than 2 percent each, trimming the gains made since the central bank cut its key lending rate and banks' reserve requirement at the weekend. Software stocks Infosys, Tata Consultancy, Wipro and Satyam rose on the U.S. election outcome, even as the rupee strengthened to a one-month high against the dollar. The United States accounts for more than half the revenue of the export-driven firms. In the broader market, 1,110 gainers were marginally ahead of 1,067 losers on volume of 147.4 million shares. The 50-share NSE index was down 2.73 percent at 3,056.05. STOCKS ON THE MOVE * Tata Steel was down 4.6 percent at 228.90 rupees. ArcelorMittal on Wednesday reported quarterly operating profit and sales below expectations. TOP THREE BY VOLUME * Suzlon Energy on 21.3 million shares * GVK Power on 9.2 million shares * Reliance Natural Resources on 8.4 million shares

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