Indian shares pare early gains as stalled US aid talks hit global sentiment

BENGALURU: Indian shares erased early gains to end lower on Thursday, as a stalemate on US fiscal support that investors hoped would help cushion the impact of the coronavirus outbreak dented global sentiment.

The NSE Nifty 50 index slid 0.9pc to close at 11,102.15 and the benchmark S&P BSE Sensex dropped 0.88pc to 37,736.07, dragged by banking and financial stocks.

MSCI's world equity index edged lower as focus shifted from the US Federal Reserve's vow to support the world's largest economy to negotiations over a new coronavirus relief package for the country.

US President Donald Trump said on Wednesday that his administration and Democrats in Congress were still "far apart" on a new coronavirus relief bill.

Senate Republican leaders on Monday rolled out a $1 trillion package of proposals, which Democrats rejected as inadequate.

"If the United States lowers the relief amount, consumption could weaken dramatically," said Rusmik Oza, head of fundamental research at Kotak Securities in Mumbai.

"Global markets are keenly watching what's happening in the United States."

In India, virus cases rose by over 50,000 in the last 24 hours and touched 1.58 million by Thursday morning, government data restrictions such as the night-time curfew and allowing gyms to open from next month.

Among equities, the Nifty banking index fell 1.95pc, while the Nifty financials index was down 1.8pc.

Large Shadow lender HDFC fell 3.8pc despite reporting an upbeat profit in the quarter to June.

Indusind Bank dropped 4pc, while Axis Bank fell 3.2pc. Refiner Bharat Petroleum Corp was the top laggard, shedding about 7.9pc.

Dr. Reddy's Labs rose nearly 6pc in the session to a record high and topped the Nifty gainers after the generic drugmaker reported a better-than-expected quarterly profit on Wednesday.