Mumbai: Indian shares turned negative on Tuesday afternoon, dragged down by leading telecoms companies Bharti Airtel and Reliance Communications.
At 12:52pm, the 30-share BSE index was down 0.04% at 17,403.65 points, with 17 components losing ground. The 50-share NSE index was up 0.1% at 5,208.95.
Markets were trading 0.3% higher in the morning session led by gains in Reliance Industries and banks, supported by firm global markets.
Lenders rebounded as investors shrugged off worries over the impact of a tighter monetary stance by the central bank and placed bets on their long-term outlook in growing economy.
The banking sector index was up 0.4% at 10,382.95 points.
“We have an attractive stance on the sector and think a buoyant economy will offset risk of rising rates,” Goldman Sachs said in a note on financial services sector on Monday.
A Reuters poll on Monday showed the central bank was likely to increase rates to a slightly higher level this year than earlier expected after surprising markets late on Friday with a 25-basis-point rise.
By 10:26am, the 30-share BSE Index was trading up 0.26% at 17,456.17, with 17 of its components gaining. The 50-share NSE index was up 0.3% at 5,220.70 points.
“The market sentiment is definitely not negative from here,” said R. K. Gupta, managing director of Taurus Mutual Fund, pointing out that it was just the timing of the central bank’s rate hike that took the markets by surprise, not the hike itself.
He added that he expected fourth-quarter earnings to be robust.
Leading private lenders ICICI Bank and HDFC Bank rose 0.2% and 1.2% respectively.
Top lender State Bank of India edged 0.2% lower.
Energy major Reliance Industries, which has the highest weight on the Sensex rose 1.1% to Rs1,085.85.
Top mobile operator Bharti Airtel reversed early gains and shed 2.2% ahead of the 25 March deadline for its exclusive talks with Zain or the Kuwaiti firm’s African assets.
Non-ferrous metals producer Sterlite Industries rose 0.6% on firm copper prices.
Aluminium maker Hindalco rose 0.5%, while Tata Steel, world’s eighth-largest steel maker by output, rose 0.8%
Top engineering and construction firm, Larsen & Toubro, was up 0.2% as it said its unit had won an order worth 15 billion rupees for constructing hospitals, residential and factory buildings.
In the broader market, gainers led losers in the ratio of 1.7:1 in a volume of 91 million shares.
Indian markets will be closed on Wednesday for a public holiday.