Indian shares flat as energy gains offset losses in financials

BENGALURU: Indian shares' recent rally was stalled on Tuesday, as gains in energy stocks, amid optimism from declining daily cases of COVID-19, were offset by losses in materials and financials.

The blue-chip NSE Nifty 50 index closed 0.05% lower at 15,574.85, while the benchmark S&P BSE Sensex was unchanged. Both the indexes closed 1% higher on Monday, building up on gains posted last week.

"We feel that the market has had a one-way run up and today it is pausing for breath and we can see a small correction around here because market has been moving up continuously for the last seven to eight trading sessions," said Samrat Dasgupta, chief executive of Esquire Capital Investment Advisors.

The market is also looking at an optimistic scenario as the economy unlocks, expecting things will return to normal in the next three to four months, he added.

Energy stocks gained after Brent crude prices topped $70 and traded at their highest since March, as optimism grew over the fuel demand outlook.

Reliance Industries Ltd and explorer Oil and Natural Gas Corporation Ltd were among the top boosts to the Nifty 50, rising 0.40% and 3.5%, respectively.

Investor sentiment has improved in recent days due to a steady decline in daily COVID-19 cases. The country on Tuesday reported its lowest daily increase in new infections since April 8 at 127,510, staying below the 200,000-mark for a fifth straight day.

Meanwhile, India's GDP picked up at 1.6% year-on-year in the January-March quarter, better than the 1.0% growth forecast by analysts in a Reuters poll. Economists, however, are pessimistic about the current quarter after a huge second wave of COVID-19 infections hit the country last month.