Indian shares pared most of the losses on Monday to end flat following reports the country may soon abolish export tax on key steel products to revive demand lifted metals stocks, offsetting a selloff in technology companies on demand worries.
The NSE Nifty 50 index ended flat at 16,216, while the S&P BSE Sensex fell 0.16% to 54,395.23. The indexes had fallen about 0.7% earlier in the session.
The tech index fell 3.1%, dragged down by Tata Consultancy Services, shares of which fell as much as 4.9% to hit a three-week low, after the company missed quarterly profit estimates by a wide margin on Friday, as employee-related expenses soared.
However, news that India government may soon lift export taxes boosted steel companies, limiting overall losses in Mumbai market, analysts said. Nifty metals index rose nearly 2%.
”At least for the time being, the rally in metals stocks is offsetting losses in tech stocks,” said Prashanth Tapse, vice president (research), Mehta Equities, adding that investors were finding lower valuations in metals stocks attractive after a 13% fall in June.
The Indian rupee ended at a record closing low against the dollar on Monday as continued foreign portfolio outflows from domestic stock markets and a broadly stronger greenback weighed on the currency despite intermittent dollar selling intervention.
Focus is now on India’s retail inflation data, due later this week, with a Reuters poll showing that the reading likely held steady in June but well above the Reserve Bank of India’s tolerance limit for a sixth month.
Eicher Motors was the biggest gainer in Nifty 50 index, rising 3.9%, while Bharti Airtel was the top loser, falling 5%.
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