India stock benchmarks reverse gains, dragged down by financials

By Bharath Rajeswaran and Vivek Kumar M

-India's equity benchmarks reversed early gains on Tuesday, weighed down by financials after Bajaj Finance cut its asset growth forecast, countering optimism over a potential trade breakthrough with Washington and a U.S. government reopening.

The Nifty 50 fell 0.31% to 25,495.65, while the BSE Sensex shed 0.31% to 83,273.74 as of 9:56 a.m. IST. Both benchmarks had opened 0.2% higher.

Fifteen of the 16 major sectors logged losses, with financials, the heaviest weighted sector in the blue-chip indexes, slipping 0.9%.

Non-bank lender Bajaj Finance declined 7% after trimming growth forecast for its assets under management on rising bad loans and strong competition.

The broader small-caps and mid-caps lost about 0.3% each.

The drop in financials outweighed the optimism over progress in the India-U.S. trade negotiations and a potential end to the U.S. government shutdown.

On Monday, U.S. President Donald Trump said that Washington was close to sealing a deal with India to boost economic and security ties, expand energy exports and spur U.S. investments, marking a sharp shift from his earlier move of doubling tariffs on Indian imports over Russian oil purchases.

Meanwhile, a majority of the U.S. Senate voted on Monday to approve legislation to end the 41-day shutdown of the federal government, as voting continued.

"There are signs of moderation in U.S. trade war against India, which is positive for markets," said G Chokkalingam, founder and head of research at Equinomics Research.

However, consolidation will likely continue as there is a major concern about liquidity available for secondary markets, given the continued boom in initial public offerings, Chokkalingam added.

Among individual stocks, biscuit maker Britannia Industries fell 5.2% following the resignation of its long-time managing director, Varun Berry, after more than a decade at the helm.

Wine maker Sula Vineyards lost 2.5% after posting a drop in September-quarter profit.

Jindal Stainless rose 2% on second-quarter profit rise.

This article was generated from an automated news agency feed without modifications to text.