By Bharath Rajeswaran and Vivek Kumar M
(Reuters) -India’s equity benchmarks were muted on Wednesday, as a drop in IT stocks on weak U.S. economic data offset broader gains, ahead of a meeting of the Goods and Services Tax Council, where tax cuts are expected on a range of goods.
The NSE Nifty 50 was up 0.06% to 24,594.7 and the BSE Sensex added 0.06% to 80,194.85 as of 10:16 a.m. IST.
Fourteen of the 16 major sectors rose on the day. The Metal index rose 1.3%, topping the sectoral gains.
“We expect steel prices to pick up in line with global trajectory and strong seasonality as the worst looks behind for the metal sector,” said analysts at CLSA, citing gains for Indian metal companies from China’s “anti-involution” plan to tackle excessive competition and low prices.
The IT index lost 0.7% after data showed contraction in U.S. manufacturing for a sixth straight month in August, signalling weakness in the world’s largest economy. IT companies earn a significant share of their revenue from the U.S.
Auto and consumer shares traded flat, ahead of the tax council’s meeting later on Wednesday, where consumption-boosting tax cuts are expected.
“The benchmark index appears to have entered a corridor of uncertainty, with investors awaiting GST council meeting which could act as a key trigger for sectoral moves,” said Rajesh Bhosale, equity technical analyst at Angel One.
The broader small-caps and mid-caps gained about 0.7% and 0.4%, respectively.
Among individual stocks, manganese ore producer MOIL jumped 6.4% after reporting 17% year-on-year growth in production in August, while sales grew about 26%.
Construction company PNC Infratech gained 3% after winning a contract worth 2.97 billion rupees (about $34 million) from the Airports Authority of India for extension of runway at Varanasi airport.
Indus Towers lost about 5% after announcing plans to expand into international markets.
“We see this foray and the capital allocation unfavourably,” given the ongoing fall in currency value and difficulties in sustaining profitability, said analysts at Emkay Global.
(Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Sumana Nandy, Sonia Cheema and Ronojoy Mazumdar)
