By Bharath Rajeswaran
(Reuters) -Indian equity benchmarks were little changed on Friday, as a drop in shares of financials and the country’s top software company Tata Consultancy Services was offset by metal companies rising on expectations of fresh China stimulus.
Both the Nifty 50 index and the S&P BSE Sensex traded flat as of 10:07 a.m. IST. They had slipped about 0.2% in early trade.
The Nifty 50 has witnessed profit-booking over the last two weeks, posting losses in seven of nine sessions. The benchmark has dropped about 5% from a record high scaled on Sept. 27.
“The upside for benchmarks appears capped due to persistent foreign selling, geopolitical conflict in the Middle East, while TCS’ profit miss and hotter-than-expected U.S. inflation reading could also weigh on sentiment,” Prashant Tapse, senior vice president of research at Mehta Equities said.
Financials fell 0.3%, after gaining about 1% in the previous session.
TCS fell 2% at the open after its September-quarter profit miss, but trimmed losses to trade 1.2% lower.
The software company’s results signalled weakness in demand recovery and a rare drop in margins while the near-term outlook remained tepid, leading to brokerages cutting their earnings estimates.
Metal companies rose 1.5%, with 13 of the 15 constituents advancing on expectations of fresh stimulus measures by top consumer China. [MET/L]
Nine of the 13 major sectors advanced on the day. The broader, more domestically-focused small- and mid-caps rose 0.75% and 0.3%, respectively
Among individual stocks, Bandhan Bank rose 9% and was on track for its best session in 10 weeks, after the Reserve Bank of India approved the appointment of veteran banker Partha Sengupta as the lender’s managing director and chief executive.
Microfinance company Creditaccess Grameen fell 3.1% after Nomura downgraded the stock to “reduce” from “neutral”, citing deterioration of asset quality.
($1 = 83.9600 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)
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