Economic news

Indian Shares Erase Gains on Fears over Oil Prices, Dollar

BENGALURU (Reuters) - Indian shares erased early gains to close little changed on Monday as concerns over higher oil prices and a strong dollar weighed on the market ahead of monthly inflation data.

The blue-chip NSE Nifty 50 index closed up 0.02% at 15,692.60 and the benchmark S&P BSE Sensex ended 0.03% lower at 52,372.69.

The Nifty IT index lost 0.45%, falling for a second straight session, as software heavyweight Infosys closed 1% lower before its quarterly earnings on Wednesday.

“Market is waiting for one big reason to go upside ... it is filled with fear of correction as monsoons have been delayed, crude oil prices are at highest levels and the dollar is getting stronger,” said Rahul Sharma, market strategist and head of research at Equity99 in Mumbai.

“Overvalued stocks are witnessing profit booking and the same money is getting shifted to undervalued stocks,” Sharma added.

Financial stocks received a boost from the Reserve Bank of India’s decision to allow reverse mergers of banks older than five years with their holding companies.

Equitas Holdings Ltd surged 20% after it started steps to merge with its unit Equitas Small Finance Bank. Ujjivan Small Finance Bank rose as much as 10.8% on its move to combine with holding company Ujjivan Financial Services Ltd.

The wider Nifty Bank index, which had earlier risen up to 0.92%, shed some gains to end 0.36% higher.

India’s consumer price inflation data, due at 1200 GMT, is likely to show an acceleration to a seven-month high in June, staying above the central bank’s comfort zone for a second straight month, a Reuters poll showed.

Globally, markets were weaker and bond yields were holding just above multi-week lows as a rise in new infections caused by the Delta coronavirus variant soured investor sentiment. [MKTS/GLOB]

Reporting by Shivani Singh and Chris Thomas in Bengaluru; editing by Aditya Soni

Source: Reuters

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