Indian shares flat as caution ahead of inflation data dulls IT rally
Updates with morning trading
By Bharath Rajeswaran
Dec 12 (Reuters) -Indian shares were little changed on Thursday as a jump in IT stocks due to the near-certainty of a U.S. rate cut next week was offset by a retreat in almost allother sectors on caution ahead of local inflation data.
The NSE Nifty 50 .NSEI was flattish at 24,638 points as of 10:06 a.m. IST, while the BSE Sensex .BSESN was little changed at 81,566.06. The smallcaps .NIFSMCP100 and midcaps .NIFMDCP100 were also flat.
IT companies .NIFTYIT, which earn a significant share of their revenue from the U.S., jumped 1.3% after in-line U.S. inflation data all but guaranteed a Federal Reserve rate cut next week. The odds of a 25-basis-point cut is about 99%, per the CME FedWatch tool.
IT majors TechMahindra TEML.NS, Wipro WIPR.NS, TCS TCS.NS, Infosys INFY.NS and HCLTech HCLT.NS were the top five Nifty gainers.
On the flip side, 11 ofthe other 12 sectors declined, with energy stocks .NIFTYENR down 0.5% and public sector banks .NIFTYPSU losing 0.7%.
While the cues from the U.S. are positive for domestic equities, "the indecision on the benchmark will continue to prevail as the resistance near current levels remains strong," said Akshay Chinchalkar, head of research at Axis Securities.
India's inflation and industrial output dataafter the bell will be crucial for market sentiment given the worries over slowing economic growth, analysts said.
Inflation likely eased in November, according to a Reuters poll. Moderating prices mayallow the Reserve Bank of India (RBI) to cut rates in February after it held rates last week.
Among individual stocks, Godawari Power GDPI.NS rose 7.3% after entering into an agreement with GAIL GAIL.NS to supply regasified liquefied natural gas.
Among other stocks, Reliance Power RPOL.NS gained 4.6% after its unit secured a solar energy and battery storage project.
($1 = 84.8360 Indian rupees)
Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sumana Nandy, Mrigank Dhaniwala and Savio D'Souza
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