Indian shares flat as financials offset gains in energy, metals
Updates to close
By Bharath Rajeswaran and Kashish Tandon
BENGALURU, Aug 19 (Reuters) -Indian shares closed flat on Monday, as gains in energy and metals stocks, on a cut in windfall tax on crude and a soft U.S. dollar, respectively, were offset by profit booking in financials.
The NSE Nifty 50 index .NSEI rose 0.13% to 24,572.65, and the S&P BSE Sensex .BSESN shed 0.02% to 80,424.68.
"We may continue to see some more time correction for benchmarks as some market participants who missed booking profits earlier are keen...," said Abhishek Goenka, founder and CEO, IFA Global.
Both benchmarks dropped about 2% each from record high levels hit on Aug. 1.
"Overall, the results season has been satisfactory but for current valuations to remain justified, we cannot afford a slowdown in earnings momentum," Goenka added.
Nine ofthe 13 major sectors logged gains. Energy .NIFTYENR and oil & gas .NIFOILGAS rose about 1.33% and 1.52%, respectively.
Oil & Natural Gas Corp ONGC.NS rose about 1.75%, with other oil upstream companies such as Oil India OILI.NS and Mangalore Refinery MRPL.NS gaining 1.75% and 3.82%. The government cut the windfall tax on crude to 2,100 Indian rupees ($25) per tonne from 4,600 rupees with effect from Aug. 17.
Metals .NIFTYMET gained 1.87%, helped by a soft U.S. dollar on expectations that the U.S. economy would avoid a recession. A weaker U.S. dollar makes metals cheaper for holders of other currencies. MET/L
Financials .NIFTYFIN and private banks .NIFPVTBNK dropped about 0.25% and 0.5%, respectively, and weighed on index gains.
"Net interest margins of banks have stabilised at low levels in the June quarter, while credit costs have risen with corporate commentary alluding to early signs of stress in retail sector," said analysts at Nuvama.
Small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 gained 1.7%and 0.2%, respectively.
Ola Electric OLAE.NS rose 10%, surging about 93% since its market debut earlier this month. CLSA said the company's entry-level e-motorcycles can gain market share in a segment dominated by Hero MotoCorp HROM.NS and Honda 7267.T.
($1 = 83.8525 Indian rupees)
Reporting by Bharath Rajeswaran and Kashish Tandon in Bengaluru; Editing by Sherry Jacob-Phillips, Nivedita Bhattacharjee and Janane Venkatraman
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