Indian shares inch lower as IT shares drag
India's stock benchmarks edged lower in early trade on Thursday, as a fall in IT stocks amid uncertainty about demand outweighed optimism over a potential free-trade agreement with Britain.
The Nifty 50 was down 0.17% to 25,179.65 points and the BSE Sensex lost 0.2% to 82,559.8 as of 10:34 a.m. IST.
Ten of the 16 major sectors traded lower, with IT index faring the worst with a 1.7% cut.
Coforge and Persistent Systems fell about 9% and 8%, respectively, while Infosys shed 1% after their quarterly results.
While the three firms posted profit growth, analysts noted that structural headwinds triggered by uncertainty over global trade tariffs continue to cloud the sector's outlook.
"It is a market that is stuck in a range. Nifty 50 has been trading between 25,000-26,000 points. The initial set of earnings suggest that first-quarter growth has been weak as expected," said Dharmesh Kant, head of equity research at Cholamandalam Securities.
Results from the banking sector have been largely mixed, except for market-beating earnings from top lenders HDFC Bank and ICICI Bank.
Meanwhile, the IT sector has been under pressure, with Tata Consultancy Services and HCLTech failing to meet expectations.
The broader, small-caps and mid-caps were down about 0.4% each on the day.
The highly-anticipated India-UK free-trade agreement, which is expected to reduce tariffs on goods such as textiles, whisky and automobiles, should boost market sentiment, analysts say.
However, the market is unlikely to see major upside until there is certainty on the U.S. trade deal, they add.
Among stocks, Indian Energy Exchange slumped 10% on concerns of market share loss stemming from a planned overhaul of electricity pricing rules.
Dr Reddy's Laboratories rose 2.4% on plans to launch a generic obesity drug in 87 countries next year, while its first-quarter profit narrowly missed estimates.
