By Vivek Kumar M and Bharath Rajeswaran
– Indian shares fell in early trade on Tuesday, with heavyweight financials leading declines as elevated crude prices hurt risk appetite, offsetting support from IT gains, strong quarterly earnings and renewed foreign buying.
The Nifty fell 0.43% to 24,477.95 and the BSE Sensex lost 0.48% to 78,167.55 as of 10:16 a.m. IST.
Ten of the 16 major sectors fell. The broader small-caps rose 0.4%, while mid-caps were down 0.2%.
Heavyweight banks and private banks dropped 0.9% each, and were the biggest losers among major sectors. Financials <.NIFTYFIN> dropped 0.7%.
Oil prices hit a one-week high of $88.09 a barrel on Tuesday, as hopes for a U.S.-Iran peace agreement faded after the two countries traded demands over compensation. [O/R]
Higher crude oil prices pose a particular challenge for India, the world’s third-largest oil importer, as they could worsen the country’s import bill, fuel inflation and pressure corporate margins.
The rising oil prices have kept the benchmark indexes subdued in the last four trading sessions, though upbeat corporate earnings and renewed foreign inflows lent some support to broader sentiment.
“A significant pivot in the market is (foreign investors) turning buyers, encouraged by the better-than-expected Q1 results and stability in the rupee,” said VK Vijayakumar, chief investment strategist at Geojit Investments.
Foreign investors have bought Indian shares worth $1.5 billion on a net basis so far in August, adding to July’s inflows of $2.1 billion. They have offloaded a record $25.7 billion worth of shares so far this year.
Providing some support was the IT index’s 0.3% rise, as easing bets of Federal Reserve rate hike continued to support sentiment in the U.S., a key revenue market for India’s IT sector. The index has gained about 2% in three sessions.
Among shares, Gland Pharma jumped 11% after its first quarter earnings topped analyst expectations, with Jefferies upgrading the stock to “buy” from “hold”.
(Reporting by Bharath Rajeswaran and Vivek Kumar M in Bengaluru; Editing by Subhranshu Sahu, Rashmi Aich and Janane Venkatraman)
