India’s benchmark shares inched lower on Wednesday, dragged by auto stocks after Tesla’s entry into the local market, while gains in heavyweight HDFC Bank capped some losses amid subdued market sentiment across Asia due to a pick-up in U.S. inflation.
The Nifty 50 was down 0.21% at 25,140.6 points, while the BSE Sensex lost 0.18% to 82,424.96, as of 10:18 a.m. IST.
Nine of the 13 major sectors declined. The auto index fell 0.8%, with Mahindra & Mahindra and Tata Motors both losing 1%.
Citi Research analysts said Tesla’s Model Y was unlikely to disrupt the Indian market immediately, but warned that reduced import duties or local manufacturing could escalate the competitive threat.
The metal index fell 0.8% on a stronger dollar, which makes commodities costlier for holders of other currencies.
The broader small-caps and mid-caps traded flat.
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HDFC Bank, the heaviest stock in both Nifty and Sensex, gained 0.8% after the top private lender said it will consider issuing bonus shares at a board meeting on July 19.
Other Asian markets inched lower, with the MSCI Asia ex Japan index dropping 0.1% while U.S. Treasury yields and the dollar rose as investors digested a slight rise in U.S. inflation.
Higher U.S. Treasury yields are negative for inflows into emerging markets such as India.
The uptick in inflation, partly fueled by President Donald Trump’s tariffs, has poured cold water on U.S. rate cut hopes and could pressure equity valuations, said Devarsh Vakil, head of prime research at HDFC Securities.
The market’s direction will hinge on developments around the U.S.-India trade deal and cues from the ongoing earnings season, said two analysts
Among individual stocks, HDB Financial lost 2.6% after posting a profit drop in the June quarter, hurt by higher provisions for bad loans.
Dixon Technologies gained 2.5% after CLSA reiterated its “high conviction outperform” rating, citing benefits from the firm’s push for deeper smartphone component integration.
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