By Vivek Kumar M and Bharath Rajeswaran
(Reuters) – India’s benchmark indexes gave up early gains on Thursday, as losses in automobile stocks and UltraTech Cement overshadowed a rise in financials following a partial reversal in tighter rules for bank loans to small borrowers and non-bank lenders.
The Nifty 50 was down 0.03% at 22,541 by 10:21 a.m. IST, while the BSE Sensex was 0.01% lower at 74,592.76.
The benchmarks opened up 0.2%.
The lack of dynamism and subdued sentiment in the market is due to caution among investors ahead of the impending monthly expiry of contracts, said Osho Krishnan, senior analyst at Angel One.
The Nifty 50’s February derivatives contracts expiry on Thursday is likely to result in some choppy trades through the session as investors will either close their positions or roll them over to the March series.
Automobile stocks fell around 1% after rising for two straight sessions. Mahindra & Mahindra was the biggest drag, falling 1.4%, after gaining 4% in the past two sessions.
UltraTech Cement dropped around 5% to its lowest levels since early June after it announced an unexpected foray into the wires and cables business, which was seen raising capital allocation risks, according to analysts.
UltraTech’s entry also hit other wires and cables companies, weighing on the broader market indexes, due to concerns of an increase in competitive intensity.
Havells India and PolyCab India tumbled 6% and 13%, respectively. KEI Industries and R R Kabel plunged 17% and 13%, respectively.
The mid-cap and small-cap indexes were down 0.7% and 1.1%, respectively.
High-weightage financials rose 0.8% while banks gained 0.6% as the Reserve Bank of India’s move to dial back tighter norms on bank loans for small borrowers and non-bank lenders is expected to improve credit flow and lower interest rates.
Bandhan Bank jumped about 5% while Ujjivan Small Finance Bank gained 4.6%.
HDFC Bank, Shriram Finance, Bajaj Finance, Muthoot Finance and Cholamandalam Investment and Finance climbed between 1% and 5%.
(Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Sumana Nandy and Eileen Soreng)
