Indian shares end flat, budget cues awaited

Indian shares end flat, budget cues awaited


Indian shares were flat after another lacklustre trading session on Tuesday, as cautious investors sat on the sidelines ahead of the federal budget, slated to be presented on July 8.

The 30-issue BSE Sensex eased 0.06 percent to 4,735.86 points in thin trade of just 67 million shares, below the 75-85 million daily average of recent weeks. Declining shares outnumbered gainers by nearly two to one.

Gains for metals, cement makers, telecoms and software firms were offset by losses in oil companies, drug makers and banks. The broader National Stock Exchange index slipped 0.49 percent to 1,474.7 points.

"Until the budget, there are no triggers to encourage buying, and while there may be some sector-specific movement on expectation of benefits, investors will prefer to wait it out," said Navin Roy, a dealer at TAIB Securities.

"The global markets are also lacklustre, and that is also dampening sentiment," he said.

Regional markets ended flat or lower on Tuesday, while the U.S. markets were sluggish ahead of an expected hike in short-term interest rates and the June 30 handover in Iraq.

India's dominant energy firm, Oil and Natural Gas Corp, fell 3.3 percent to 622 rupees after its full-year profit fell nearly 18 percent, squeezed by subsidies for state-run refiners to offset high global crude prices.

State-run refiner Hindustan Petroleum Corp Ltd slid 2.4 percent to 322.25 rupees.

Drug firms, hit by sector downgrades last week, also fell, with Cipla Ltd slipping 4.8 percent to 197.25 rupees.

Banks slipped further on fears that interest rates would harden as inflation rises, leading to lower treasury profits. ICICI Bank, the No. 2 commercial bank, fell 1.3 percent to 252.60 rupees and private-sector UTI Bank slipped four percent to 119.65 rupees.

The Indian rupee hit an 11-month trough on Tuesday due to dwindling dollar inflows from foreign investors. The currency has lost nearly two percent of its value in the past week, but it has boosted software firms, which tend to derive more than two-thirds of their revenues from exports.

Bellwether Infosys Technologies Ltd, the No. 2 exporter, gained 0.5 percent to 5,375.95 rupees and Satyam Computer Services Ltd, the No. 4 exporter, rose 2.2 percent to 293.20 rupees.

Indian shares end flat, budget cues awaited