By Bharath Rajeswaran
(Reuters) -Indian shares were flat at the open on Tuesday, as caution prevailed ahead of the U.S. presidential elections and dull earnings and sustained foreign outflows weighed on sentiment.
The NSE Nifty 50 shed 0.01% to 23,992 points as of 9:32 a.m. IST, while the BSE Sensex lost 0.06% to 78,731.73.
Both benchmark indexes fell about 1.25% each on Monday, their biggest single-day loss since Oct. 3.
Democrat Kamala Harris and Republican Donald Trump remain virtually tied in opinion polls ahead of polling in the U.S. Presidential election on Tuesday. The winner will likely not be known for days after voting ends.
A Trump win could lead to lower corporate tax rates in the US, which is expected to boost spending and in turn benefit several equity sectors in India, while a Harris victory is seen as a sign of policy continuity, a neutral-to-mildly-positive outcome for Indian stocks, said three analysts.
With Indian markets already trading at elevated valuations, the uncertainty over U.S. presidential elections has served as a key catalyst for the ongoing correction, said Vinit Bolinjkar, head of research at Ventura Securities.
Lacklustre earnings and sustained foreign selling have weighed on domestic equities over the last five weeks, in which the benchmark Nifty 50 has dropped 8.7% from the record high levels hit on Sept. 27.
Foreign institutional investors net sold Indian shares for the 26th consecutive session on Monday, with outflows amounting to 43.30 billion rupees ($515 million).
Seven of the 13 major sectors declined on the day. The broader, more domestically focused small- and mid-caps traded flat.
($1 = 84.1360 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sumana Nandy and Janane Venkatraman)
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