By Hritam Mukherjee
(Reuters) – Indian shares surrendered early gains on Tuesday, dragged by automakers and IT firms, as a hotter-than-expected September inflation print dulled bets of a domestic rate cut this year, dampening investor sentiment.
The Nifty 50 index fell 0.25% at 25,068 points as of 11:09 a.m. IST, while the S&P BSE Sensex dropped 0.2% to 81,807.
Data released late on Monday showed rising food prices in September pushed India’s retail inflation to a nine-month high, which economists said could delay domestic rate cuts to early next year instead of December.
Ten out of 13 sub-sectors traded lower. Auto stocks fell 1.1% as prospects of delayed rate cuts spooked investors in the segment, which is heavily dependent on customers taking on bank loans.
IT stocks reversed early session’s gains and traded flat, while metals were down nearly 1%.
Markets are unhappy with the inflation data and the possibility of further delays in rate cuts if price volatility continues, said Deven Choksey, managing director of KR Choksey Group.
Reliance Industries – the second heaviest on the Nifty 50 – fell 0.7% after reporting a drop in second-quarter profit on Monday after the markets closed.
Inflation worries overshadowed gains in oil marketing companies and paint makers, triggered by a slide in global oil prices following a media report that said Israel is willing not to strike Iranian oil targets, easing fears of supply disruption. [O/R]
Lower oil prices bode well for India, the world’s third-largest importer.
State-run oil marketing firms such as HPCL, BPCL and Indian Oil Corp rose 3.5%, 1.9% and 1.2% respectively. Paint makers Asian Paints and Berger Paints rose 1.6% and 3%, respectively.
Oil explorers Oil India shed 4% and ONGC lost 1.5%.
Hyundai India’s $3.3 billion IPO, the country’s biggest share sale, opened for retail buyers on Tuesday and was subscribed 7% as of 11:09 a.m. IST.
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Sherry Jacob-Phillips, Sonia Cheema and Janane Venkatraman)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.