Bengaluru (Reuters) – Indian shares were largely flat on Tuesday, as losses in index heavyweight ITC following its demerger update offset gains in metal stocks after China’s pledge to provide policy support to aid economic recovery.
The Nifty 50 (.NSEI) index was up 0.07% to 19,684.85, while the S&P BSE Sensex (.BSESN) gained 0.02% to 66,403.50, as of 10:14 a.m. IST.
Eleven of the 13 major sectoral indexes logged gains, with the metals index (.NIFTYMET) rising 1.7% and the auto index (.NIFTYAUTO) adding 0.9%.
The rise in metals stocks comes after China, the world’s largest producer and consumer of metals, announced plans to provide further support to support its post-COVID economic recovery. JSW Steel (JSTL.NS) and Hindalco (HALC.NS) were among the top Nifty 50 gainers.
Asian markets advanced on hopes of further stimulus measures from China, with the MSCI Asia ex-Japan index (.MIAPJ0000PUS) gaining 1.5%.
Auto stocks rose, led by TVS Motor Company(TVSM.NS) on reporting a bigger-than-expected rise in quarterly profit, aided by strong two-wheeler demand.
Index heavyweight ITC (ITC.NS) lost as much as 3.26% and was the top Nifty 50 loser. The company’s board gave in-principle approval to demerge its hotels business into a new entity on Monday. ITC will own a 40% stake, while shareholders will hold the remaining.
“We believe some investors may have preferred a vertical split (100% direct),” Jefferies said in a note.
The stock has lost 6.5% so far this week. The company will host an analyst/investor call on July 27 to discuss further details on the proposed demerger.
“Believe that the gains in the market will be capped in the near-term given elevated valuations and soft start to June-quarter earnings season,” said Pankaj Chhaochharia and Abhimanyu Godara of Antique Stock Broking.
Analysts also expected caution to prevail in markets ahead of the Federal Reserve’s policy meeting on Wednesday.
