By Bharath Rajeswaran
BENGALURU (Reuters) – Indian shares were largely flat on Tuesday, erasing their opening gains, as a drop in life insurance stocks on worries of slowing growth momentum weighed on high-weightage financials and offset a rise in IT and pharma stocks.
The Nifty 50 index was up 0.02% at 24,942.55 points, while the S&P BSE Sensex was little changed at 81,611.77, as of 10:34 a.m. IST.
Both the benchmark indexes rose about 0.25% in early trade before surrendering gains, weighed down by financials, which lost 0.5%.
Life insurers HDFC Life and SBI Life lost 2.5% each, after posting modest growth in premiums for August.
“Growth slowdown was sharper for large insurers compared to small insurers while growth in the number of policies sold also moderated in August,” said analysts at HSBC Securities and Capital Markets (India).
The drop in financials offset a 0.7% rise in the information technology index.
Pharma stocks gained 1% after India’s goods and services tax (GST) council recommended a reduction in tax rates on specific cancer drugs.
Meanwhile, the U.S. consumer price index, due on Wednesday, is expected to show that inflation remains on the path back to the Federal Reserve’s target and play a crucial part in deciding the size of a likely rate cut next week.
U.S. inflation and jobless claims data will be pivotal in determining the market’s direction, Centrum Institutional Research said, adding that the domestic market is currently navigating a delicate balance between potential rate cuts and U.S. recession apprehensions.
Among individual stocks, snack makers like Gopal Snacks, Prataap Snacks and Bikaji Foods rose about 4% each after the GST council recommended cutting the tax rate on Indian savory snacks to 12% from 18%.
The more domestically focussed small- and mid-caps rose about 1% each.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Rashmi Aich and Sonia Cheema)
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