By Hritam Mukherjee and Bharath Rajeswaran
(Reuters) -Indian equities surrendered the early gains on Tuesday, dragged down by a decline in metals after a seven-session rally, while information technology stocks held steady.
The Nifty 50 index fell 0.2% to 25,759 points as of 11:25 a.m. IST, while the S&P BSE Sensex lost 0.16% to 84,161.8.
Metals shed 1%, taking a breather after rising about 10% over the previous seven sessions boosted by top consumer China’s fresh stimulus. [MET/L]
The 15-member gauge was the top percentage loser among the 10 major sectors trading lower.
Top two index heavyweights, Tata Steel and Hindalco Industries shed 1.5% and 0.9%, respectively.
There could be some profit taking in metals after the rally as investors seek further clarity on whether China’s stimulus measures would be enough to prop up its economic growth, said G Chokkalingam, Managing Director of Research at Equinomics Research.
Meanwhile, IT firms added 0.5%, led by a 3% rise in Tech Mahindra after brokerage CLSA’s upgrade.
Positive commentary from the U.S. Federal Reserve Chair Jerome Powell on the health of the U.S. economy aided interest in IT companies, three analysts said. Indian IT firms earn a significant share of their revenue from the U.S.
Federal Reserve Chair Jerome Powell said on Monday that the U.S. central bank was not in a hurry to opt for aggressive rate cuts after new data boosted confidence in ongoing economic growth and consumer spending.
Gold lenders Manappuram Finance and Muthoot Finance slid 2% on growth concerns after the Reserve Bank of India (RBI) flagged irregular practices in the industry.
Among individual stocks, Mahindra & Mahindra rose 1.4% after its September total vehicle sales grew 16% from a year earlier.
The broader, more domestically focussed small-caps rose 0.7%, while mid-caps fell 0.1%.
(Reporting by Hritam Mukherjee and Bharath Rajeswaran in Bengaluru; Editing by Sumana Nandy and Mrigank Dhaniwala)
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