On Wednesday, Indian shares were flat as the escalating Middle East war and fears about U.S. interest rates weighed on sentiment. A decline in financials after Bajaj Finance missed profit projections was partially offset by gains in metals on good economic data from China.
Financials with a high market cap down 0.52%. Bajaj Finance was the worst performer on the Nifty 50 index, losing up to 2.13%.
The non-bank lender reported a lower-than-anticipated increase in September quarter earnings after the close of business on Tuesday due to higher provisions for bad loans.
Metal prices increased by about 1% as statistics revealed that China’s economy expanded more quickly than anticipated between July and September, allaying concerns about the top metal consumer’s economic rebound.
Tata Steel, JSW Steel, and Hindalco were among of the top Nifty 50 gainers.
Strong retail inflows helped the more domestically oriented small- and mid-caps outperform the blue-chips, advancing 0.5% and 0.2%, respectively.
The increase in U.S. bond yields and the increase in petroleum prices, according to Gaurav Dua, head of capital market strategy at Sharekhan by BNP Paribas, have affected sentiment.
“However, it must be noted that domestic markets have been able to absorb weak global news flow,” he said, advising investors to take advantage of the decline to purchase financials, real estate, and specific consumer firms.
After the Gaza hospital explosion dashed expectations of controlling the Israel-Hamas armed war, Asian stocks dropped. Strong retail sales data rekindled rate fears, which negatively impacted sentiment, and led to an increase in U.S. Treasury yields.
Concerns over Middle Eastern supply disruptions drove up oil prices to about $92 per barrel. Rising oil prices are detrimental to crude importers like India.