Indian shares close flat for second session on renewed Middle East escalation
- Nifty 50 shed 0.23% to 23,161.6, while the BSE Sensex lost 0.2% to 73,832.55
Indian benchmark shares ended flat for a second straight session on Thursday as risk-off sentiment remained firm following renewed escalation in the Middle East conflict, while IT stocks declined for a seventh consecutive session on AI-led disruption.
The Nifty 50 shed 0.23% to 23,161.6, while the BSE Sensex lost 0.2% to 73,832.55.
Twelve of 16 major sectors logged losses. The broader small-caps and mid-caps fell 0.7% and 0.8%, respectively.
The United States and Iran traded air attacks for a second straight day on Thursday, with President Donald Trump vowing further strikes if Tehran does not immediately agree to a peace deal.
Meanwhile, data released overnight showed U.S. consumer inflation increased at its fastest pace in three years in May, raising the risk of a prolonged period of high interest rates.
High U.S. interest rates would not only lure foreign investors away from emerging markets such as India but also impact spending in the world’s largest economy.
Indian IT firms, which get the bulk of their revenue from the U.S., dropped 1.6%. The index has dropped 10.6% cumulatively in seven straight sessions.
Renewed concerns over the impact of AI disruption, following Anthropic’s new tools, also contributed.
“The key concern is that productivity improvements in software engineering are occurring much faster than in non-software domains,” said Sumit Pokharna, senior vice president of fundamental research at Kotak Securities.
Private banks rose 0.6%, partially offsetting the broader decline, as the central bank’s decision earlier this week to provide concessional forex swap for overseas borrowings and allow leverage for NRI deposits made bank stocks more attractive.
Among individual stocks, television broadcaster Zee Entertainment, which recently secured streaming rights for FIFA World Cup in India, jumped 8.3% after it announced plans to raise 23 billion rupees in phases. The World Cup is scheduled to begin on June 12 as per Indian Standard Time.
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