By Bharath Rajeswaran and Vivek Kumar M
MUMBAI (Reuters) -India’s stock benchmarks erased intraday losses to settle flat on Thursday, as news of a U.S.-Russia presidential meeting helped markets rebound from a slide sparked by the U.S. doubling tariffs on Indian goods.
The Nifty 50 and Sensex dropped nearly 1% intraday, hitting their lowest since May.
The Nifty, however, closed 0.09% higher at 24,596.15 points and the Sensex gained 0.1% to 80,623.26.
The benchmarks recovered after the announcement of a meeting between Russian President Putin and U.S. President Trump in the coming days, which analysts say will soften Washington’s stance on India’s imports of Russian oil.
The broader small- and mid-caps rose 0.2% and 0.3% respectively.
On Wednesday, Trump imposed an additional 25% tariff on Indian goods over the 25% duty announced earlier, citing New Delhi’s continued buying of Russian oil.
“The prima facie imposition of a combined 50% tariff on Indian exports is negative for markets and for investor sentiment, including foreign institutional investors,” said Peeyush Mittal, portfolio manager at Matthews Asia.
Foreign portfolio investors have sold Indian shares worth $900 million so far in August, following $2 billion in outflows in July amid trade uncertainty and weak corporate earnings.
Still, expectations of a resolution before the new tariffs take effect on August 27 and the news of U.S.-Russia presidential talks helped markets recover from the day’s losses, three analysts said.
Energy and oil & gas indexes, which lost about 1% each during the session, dragged by Reliance and oil-marketing companies on fears of rising costs if Russian oil supplies are disrupted, pared most of their losses to close about 0.2% lower.
IT and pharma stocks, which have high exposure to the U.S. economy, also rebounded from intraday declines and rose 0.9% and 0.8%, respectively.
Among individual stocks, Hero MotoCorp jumped 4.2% after reporting a quarterly profit beat.
(Reporting by Bharath Rajeswaran and Vivek Kumar M; additional reporting by Pranav Kashyap in Mumbai; Editing by Sumana Nandy, Nivedita Bhattacharjee and Sonia Cheema)
