India’s equity benchmarks inched lower on Thursday, dragged by high-weight financials, as a global rally driven by the U.S.-China trade thaw paused.
The Nifty 50 fell 0.41% to 24,566.7 and the BSE Sensex lost 0.47% to 80,937.53 as of 10:29 a.m. IST.
Eleven of the 13 major sectors declined on the day, with heavyweight financials dropping 0.5%.
The three heaviest stocks in the Nifty, private lenders HDFC Bank and ICICI Bank and the oil-to-telecom conglomerate Reliance Industries, fell about 0.6% each.
The recent dip and profit taking in the benchmark index and large-caps signal rising caution among investors after the recent rally, said Ajit Mishra, senior vice president of research at Religare Broking.
The Nifty 50 and Sensex rose about 2.5% in the previous three sessions, hitting seven-month highs on Tuesday, as the India-Pakistan conflict eased as did the U.S.-China trade war.
India’s small- and mid-caps rose 0.4% and 0.2% on the day. They have gained 7% and 5.7% so far this week.
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The possibility of “Sell India-Buy China” tactical trade after the trade deal will weigh on large-caps, which strengthens the case for a further rally in mid- and small-caps, said VK Vijayakumar, chief investment strategist at Geojit Investments.
Overnight, Wall Street ended mixed following a sharp rally earlier this week while U.S. Treasury yields remained elevated.
Asian markets were muted, with the MSCI Asia ex-Japan index flat after a 1.5% gain on Wednesday.
Investors awaited the U.S. Federal Reserve Chair Jerome Powell’s speech later in the day for cues on the interest rate outlook.
Shares of Hero MotoCorp rose 2% to be the top Nifty gainers, after India’s top two-wheeler maker announced the launch of two affordable electric vehicles and said a better monsoon will boost rural demand.
Metal shares rose 0.9%, adding to 2.5% rise in the previous session.
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