India’s equity benchmarks inched lower on Tuesday as investors booked some profits after a recent market rally, outweighing gains in metals on optimism over U.S.-China trade talks.
The Nifty 50 index fell 0.11% to 25,936.20, while the BSE Sensex index lost 0.18% to 84,628.16. This was only their second session of losses in nine trading days.
The broader small-caps and mid-caps were little changed.
The benchmarks are up 5.4% so far in October and are set for their best monthly performance since March, driven by stable quarterly earnings, strong festive season sales, cooling global trade tensions, and hopes of a U.S. rate cut.
Analysts said that investors likely booked profits on Tuesday as the Nifty 50 is just 1.3% away from record highs.
Heavyweight financials dropped 0.2%, while IT stocks fell 0.7% on the day.
“Foreign flows will be crucial for further upside from hereon. Any trade deal between India and U.S. would be a positive trigger,” said Aamar Deo Singh, senior vice-president at Angel One.
Foreign investors have bought $895 million of Indian shares so far in October after net selling for three consecutive months.
Metal stocks rose 1.23% on the day to lead sectoral gains after U.S. and Chinese officials finalized a trade framework for Presidents Donald Trump and Xi Jinping to consider later this week.
Tata Steel rose 2.9%, and was the top Nifty gainer, as Motilal Oswal upgraded it to “buy” from “neutral” on strong domestic outlook.
Meanwhile, Federal Reserve policymakers are expected to cut rates by 25 basis points on Wednesday, with markets anticipating another rate reduction in December.
Public sector banks climbed 1.21% to a record high, extending Monday’s 2% rise after a Reuters report said India plans to raise the direct foreign investment limit in state-run banks to 49%.
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