Indian shares end little changed ahead of Mideast ceasefire deadline

Indian equity benchmarks ended little changed on Monday, as earnings-fuelled gains in banks were offset by concerns that the ceasefire between the U.S. and Iran might not hold.

The U.S. seized an Iranian cargo ship that tried to run its blockade and Iran vowed to retaliate as efforts to build a more lasting peace in the region appeared under threat, with Tehran saying it would not participate in a second round of talks. The ceasefire between the two sides ends on Tuesday.

Brent Crude oil rose to $95 per barrel. India imports a bulk of its crude and gas requirements and a prolonged spike in prices could worsen the growth and inflation outlook for the economy.

“The market undertone is positive thanks to strong earnings from banks and a slight improvement in newsflow from the Middle East,” said Anita Gandhi, head of institutional business at Arihant Capital Markets.

“However, lack of certainty over whether the ceasefire will remain in place is keeping investors cautious.”

India’s benchmark Nifty 50 rose 0.05% to 24,364.85, and the Sensex advanced 0.03% to 78,520.3. Both indexes settled at their highest closing levels since March 6.

Nine of the 16 major sectors gained while the broader small-caps and mid-caps fell 0.5% and 0.2%, respectively.

Banks advance

Financials rose 0.1% as investors reacted to earnings from several private lenders over the weekend.

ICICI Bank added 0.7% after beating fourth-quarter earnings estimate, while HDFC Bank dropped 0.6% as its weaker-than-expected net interest margin disappointed investors.

India’s largest lender State Bank of India led the gains among bank stocks, rising 2.6% on prospects for improved earnings.

Business updates and earnings of lenders released so far indicate that the rest, including SBI, are likely to have outperformed, according to analysts led by Param Subramanian at Investec.