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Monday, October 7, 2024
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HomeIndiaIndian shares reverse early gains as earnings, geopolitical concerns weigh

Indian shares reverse early gains as earnings, geopolitical concerns weigh

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By Bharath Rajeswaran and Hritam Mukherjee
(Reuters) -Indian shares reversed course to decline on Monday as worries over the escalation of the conflict in the Middle East and likely moderation in corporate earnings weighed on investor sentiment.

The Nifty 50 and S&P BSE Sensex opened about 0.3% higher but by noon IST, had reversed to drop 0.44% to 24,905.5 points and 0.28% to 81,467.45, respectively.

The two indexes are poised to extend a five-session losing run during which volatility has been steadily rising due to concerns over the escalation of geopolitical tensions and as foreign investors withdrew funds, likely to invest in China.

That, said two analysts, was exacerbated by a mixed bag of pre-earnings corporate updates and led investors to book profits over the last few sessions.

The volatility index rose 15.15 to a near one-month high on Monday.

The broader, more domestically focused small- and mid-caps slid 2.25% and 1.75%, respectively, underperforming the benchmarks.

“The valuations in the mid-cap and small-cap space seem overstretched and hence investors are booking profits more in those segments compared to benchmarks,” said Abhishek Goenka, founder and CEO of IFA Global.

The IT index advanced 0.4% and was the only one among the 13 major sectors in the green.

The gains in IT firms, which earn a bulk of their revenue from the U.S., were supported by a healthy U.S. jobs report that allayed fears of a recession in the world’s largest economy.

LTIMindtree and Mphasis rose about 2%, after JP Morgan upgraded the IT companies to “overweight” from “neutral”, saying they were the best placed to benefit from a recovery in the banking and financial services segment.

Titan Company fell 2.26% as brokerages flagged concerns of margin contraction after it’s pre-earnings update. ($1 = 83.9630 Indian rupees)

(Reporting by Bharath Rajeswaran and Hritam Mukherjee in Bengaluru; Editing by Abinaya Vijayaraghavan, Savio D’Souza and Sonia Cheema)

Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.

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