Indian shares flat as IT gains offset financials drop; Mideast looms

Indian shares ended little changed on Thursday, with a rise in IT stocks offsetting a post-results drop in key financial firms, while an escalating crisis in the Middle East kept investors at bay.

India’s benchmark Nifty 50 shed 0.02% to 24,072.75, while the BSE Sensex was flat at 77,186.87.

HSBC upgraded Indian equities to “neutral” from “underweight”, citing softer crude prices and rupee-stabilising measures that have revived foreign inflows.

Brent crude is down about 33% from its April peak, though renewed attacks between U.S. and Iran have pushed prices off recent lows.

Traders are waiting for a fresh trigger before taking aggressive positions, Axis Securities said in a note.

“A decisive breakout above 24,500 for Nifty is needed for bulls to regain control, while the benchmark has a strong support at 23,800 on any corrective move,” the brokerage said.

Uncertainty over how the Middle East conflict evolves could shift capital toward domestic themes, while the ongoing earnings season will help identify pockets of resilience, analysts said.

Nine of the 16 major sectors logged gains while the broader small-caps and mid-caps fell 0.1% and 0.4%, respectively.

Heavyweight financials lost 0.5% after quarterly results, with ICICI Lombard falling 10.5% to a two-year low on fears earnings pressure will persist, while ICICI Prudential Life slid 3.1%.

The IT index gained 0.7% after slipping 1.7% in the previous two sessions. Wipro and Tech Mahindra, which are due to report after market hours, gained 1.8% and 0.8%.

While peers TCS and HCLTech beat revenue estimates, the demand slowdown persists for India’s IT sector with no visible signs of a revival in client spending, according to analysts led by Ambit Capital’s Ashwin Mehta.

Among other stocks, Dixon Technologies jumped 6.3% after the federal cabinet approved schemes to boost mobile phone and semiconductor manufacturing.