BENGALURU (Reuters) – Indian shares were mostly muted on Wednesday as a weakness in banking shares was offset by gains in pharmaceuticals and heavyweight Reliance Industries after an investment deal by General Atlantic in the conglomerate’s retail arm.
By 0448 GMT, The broader NSE Nifty 50 index was down 0.02% at 11,225 and the S&P BSE Sensex was mostly unchanged at 37,941.30.
The Nifty bank index fell 1% and the public sector bank index slid 1.2%.
“The banking sector will be under pressure till some clarity emerges from the Supreme Court (on the loan moratorium case),” said Saurabh Jain, assistant vice president at SMC Global Securities Ltd.
“Wherever there is optimism and managements are confident (in sectors like IT and pharma), investors are not worried about putting more money and the valuation. But, no one wants to put money where there are concerns on the operational side and (have) regulatory issues,” Jain said.
India’s top court will next week hear a case on banks waiving interest rates on loans under a moratorium. Analysts expect weakness among bank stocks to linger as the industry stares at more defaults by coronavirus-hit businesses, raising concerns of a fresh bout of bad loans.
The Nifty pharma index rose 1.75%.
Reliance Industries Ltd was the top boost to the Nifty 50 index, gaining nearly 1%, after the company said U.S. fund General Atlantic plans to invest 36.75 billion rupees ($498.31 million) for a 0.84% stake in its retail arm.
Shares of Bharat Petroleum Corp fell 4.1% after Reuters reported that Rosneft and Saudi Aramco were unlikely to bid for the Indian refiner’s stake.
Investors are also awaiting clues about the Indian economy from the August infrastructure data and the fiscal deficit numbers due later in the day.
Reporting by Nallur Sethuraman in Bengaluru; editing by Uttaresh.V