Mumbai: Markets erased early gains and turned flat on Wednesday as concerns over rising borrowing costs and high inflation kept investors on the sidelines.
Traders said investors were mostly churning their portfolios, picking up stocks such as engineering conglomerate Larsen & Toubro that had fallen in recent sessions.
At 10:55am, the 30-share BSE index was up 0.04% at 17,567.93, with 14 components declining. It rose as much as 0.7% early and had briefly turned negative.
“In the near term, it is likely to be under pressure. It does not look like it has formed a conclusive bottom as yet,” said Kaushik Dani, head of equities at Peerless Mutual Fund.
He said domestic issues such as high inflation and falling growth were keeping investors downbeat.
Vital monsoon this year is expected to be just below normal, the weather office said in a revised forecast on Tuesday, but the rains could pick up after 15 July, during the key planting month for rice, sugar cane and corn.
The benchmark has fallen 14.4% in the year to date, with foreign funds pulling out $453 million on slowing corporate earnings growth as rising interest rates bite spending.
Drugmaker Sun Pharmaceutical rose 1.7% after its unit received approval from the US Food and Drug Administration for a new drug application to market a generic version of sumatriptan succinate injection, that is used in the treatment of migraine.
The 50-share NSE index was up 0.2% at 5,285.20 points.
Around 167 million shares changed hands on NSE, as losers outpaced gainers in a ratio of 1.2 to 1.
Energy giant Reliance Industries led the losses, dropping 0.9% after gaining 1.9% in the previous session.
Financials were mostly lower on worries over rising interest rates and on expectations that loan demand may taper off as economic growth slows.
Top lender State Bank of India and private lender HDFC Bank shed 0.4% and 0.3% respectively. ICICI Bank bucked the trend and gained 0.9%.
Engineering and construction firm Larsen & Toubro gained 0.9%, after falling more than 2% over two sessions.
Wockhardt was up 1.1% at Rs 353.30 after the company said it had launched three new products in the United States.
Four Soft rose 10% to Rs 14.30 after the software services firm said it signed a deal with Mexico-based Logistics Dynamic Corp to implement freight management solution.