Indian benchmarks end flat as earnings worries counter gains in Reliance, TCS

India’s benchmark indexes ended largely unchanged on Wednesday as concerns over slowing corporate profits and the increasing likelihood of fewer U.S. rate cuts offset a rise in Reliance Industries and Tata Consultancy Services.

The Nifty 50 shed 0.08% to 23,688.95, while the BSE Sensex was down 0.06% at 78,148.49.

Both the benchmarks fell about 0.8% each during the session before paring losses in the last two hours.

Recent business updates from companies, including Dabur India and Hero MotoCorp, have not led investors to believe that corporate profit growth in the third quarter will be any better than the previous one, which was the worst in four years.

“Worries over moderation in earnings growth and expensive valuations are weighing on domestic markets, while a cocktail of pivotal global events such as Donald Trump’s victory in U.S. elections and likelihood of fewer U.S. rate cuts are adding to uncertainty among investors,” said analysts at Motilal Oswal Financial Services.

ONGC rally, Reliance recovery prop up Indian shares after Monday’s slump

U.S. data on Tuesday showed a resilient economy and labour market, indicating fewer rate cuts this year, which would make the United States more attractive to investors in comparison to emerging markets, including India. Oil-to-telecom conglomerate Reliance Industries, the second-heaviest weighted stock on the Nifty, rose 2% on the day after Jefferies reiterated its “buy” rating, saying the stock’s valuation was the lowest since the onset of COVID-19.

The IT index gained 0.6%, led by a 2% jump in Tata Consultancy Services, ahead of its December-quarter earnings on Thursday.

The broader, more domestically-focussed smallcaps and midcaps declined 1.7% and 1.1%, respectively.

Among individual stocks, real estate firm Sobha fell 5.8% after reporting a drop in total home sales in the December quarter.

Kingfisher beer maker United Breweries lost 3.6% after it said it will suspend beer supply to Telangana Beverages Corp due to stagnant prices and unpaid dues.