IGI Logo

Indian shares struggled for direction on Tuesday, see-sawing between optimism that the Reserve Bank of India will pause rate hikes after Wednesday, and worries that the Fed was likely to keep upping rates for longer.

The Nifty 50 index was down 0.10% to 17,746.40, while the S&P BSE Sensex fell 0.17% to 60,410, as of 11:02 a.m. IST. Both the benchmarks had risen 0.25% during the session.

FMCG stocks fell 1%, dragged by heavyweight ITC, which has taken a breather after rallying to fresh record highs over the last three sessions.

The RBI is expected to pause after Wednesday's expected 25 basis points rate hike as it tries to support economic growth and tame inflation.

Meanwhile, Wall Street equities extended their fall overnight after data on Friday showed resilient U.S. jobs markets that heightened concerns that the U.S. Federal Reserve will keep rates higher for longer. [FEDWATCH]

"There is a shift happening towards risk-off sentiment in global equities after U.S. jobs data," said Aishvarya Dadheech, director and fund manager at Ambit Asset Management.

Analysts also said that the persistent foreign selling in Indian equities was a cause for concern.

Twenty of Nifty 50 stocks advanced with Adani Enterprises and Adani Ports among the top gainers.

Most of the Adani group stocks, including Adani Transmission, Adani Wilmar, Adani Green gained after the National Stock Exchange revised circuit limits of Adani Green and Adani Transmission to 5% from 10%, to prevent large movements in price of stocks in a very short time.

The rebound comes after the recent selloff in Adani group stocks, which has caused a rout of over $100 billion in market capitalisation after U.S. short seller Hindenburg's report on Jan. 24.

"Adani Group's decision to repay $1.11 bln loans ahead of maturity in 2024 and to continue with its capex plans have arrested the fall," said Anita Gandhi, director at Arihant Capital Markets.

($1 = 82.7220 Indian rupees)