Indian shares flat as financials counter tech gains

BENGALURU: Indian blue-chip stock indexes retreated from record highs to end flat on Wednesday following a subdued start to trading in European peers, with losses in domestic financial stocks offsetting gains in technology and metal companies.

The NSE Nifty 50 index ended 0.06% higher at 16,634.65, while the Sensex was down 0.03% at 55,944.21. The indexes had touched life-highs at 16,712.45 and 56,198.13 earlier in the session.

Indian benchmark indexes have flirted with record highs in recent months on abundant liquidity and reopening of some states after easing of coronavirus curbs, but analysts have warned that the domestic market's rally may not sustain.

"We are outperforming compared to other emerging markets, and that's because retail participation in the market is at a level unimaginable even a few years ago," said AK Prabhakar, head of research at IDBI Capital.

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Indian markets have outperformed other Asian peers this year, with the Nifty 50 gaining nearly 19% and the Sensex gaining about 17% up to Wednesday's close.

A Reuters poll of analysts has shown that the country's liquidity-driven stock market rally is expected to cool next year as global and domestic monetary policies start to tighten.

On Wednesday, Tata Motors gained 1.64%, while Tata Steel fell 1.03% and Asian Paints was down 0.26%.

The Nifty IT subindex ended up 0.73%, while the Nifty Pharma index ended 0.33% lower and the Nifty Bank index was down 0.35%.

Markets globally were looking ahead to Friday, when Jerome Powell, chair of the US Federal Reserve, is due to speak at the annual Jackson Hole event, as worries about the tapering of the Federal Reserve's pandemic-era stimulus eased.