BENGALURU: Indian shares surrendered early gains on Monday, dragged down by a decline in information technology stocks on fading expectations of an early Federal Reserve rate cut.
The NSE Nifty 50 index was down 0.06% at 22,028.45 as of 9:57 a.m. IST, while the S&P BSE Sensex shed 0.11% to 72,342.46.
Information technology stocks dropped 1% after data showed US producer prices increased more than expected in January, adding heft to the view that any potential Fed rate cuts are not imminent.
IT companies earn a significant share of their revenue from the US Asian markets were muted. Meanwhile, energy stocks rose 0.4%.
Tata Power Company gained 2% on getting a letter of intent to acquire a 8.38 billion rupee (nearly $101 million) power project.
Pharma stocks advanced 0.5%. Natco Pharma added 5.5% and was the top percentage gainer in the pharma index. Ten of the 13 major sectors logged gains.
“Domestic equities have remained resilient in the face of fading hopes of an early US rate cut, thanks to strong macroeconomic fundamentals and persistent domestic inflows,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.
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Khemka added that in-line quarterly earnings, sustained earnings stability in energy companies and interest in public sector banks due to valuation comfort have aided sentiment and could even power markets to new highs this week.
The broader, more domestically-focussed small- and mid-caps gained about 0.4% each, outperforming the benchmarks.
Among individual stocks, Paytm rose 5% after Reserve Bank of India granted its payments bank more time to wind down operations and the company partnered with Axis Bank to keep some of its popular products running.
Life Insurance Corporation of India gained 3% after receiving refund orders for 217.41 billion rupees from the income tax department.
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