Energy shares drag Indian shares down ahead of inflation data

By Bharath Rajeswaran

BENGALURU (Reuters) -India’s Nifty 50 and Sensex fell on Tuesday, weighed by a pullback in energy shares ahead of inflation data from India and the United States, due later in the day.

The NSE Nifty 50 index fell 0.43% to 20,906.40, while the S&P BSE Sensex shed 0.54% to 69,551.03.

The blue-chip indexes logged their biggest single-day percentage loss since Nov. 1 and Oct. 26, respectively.

The Nifty had gained as much as 0.19% in the first hour of trade and hit a record high for the eighth session in nine.

India’s retail inflation likely picked up in November due to higher food prices, reversing a three-month decline, a Reuters poll found. The data is due at 5:30 p.m. IST.

The U.S. Consumer Price Index (CPI) report, while expected to show inflation moderating, is still seen above the Fed’s target.

The inflation data and the U.S. Federal Reserve’s policy decision and commentary on Wednesday could influence the near-term rate outlook, according to three analysts.

Energy stocks fell 1.31% on the day, snapping a rally which saw the index climb about 20% over last six weeks, supported by a fall in crude oil prices. [O/R]

Realty also dropped 1.75%, on the day. The index had gained about 21% since the beginning of November, boosted by strong quarterly results and robust demand outlook.

The more domestic focussed small-caps closed flat, while mid-caps settled 0.39% lower.

“We expect large-caps to outperform in this leg of the rally aided by return of foreign inflows while pockets in small-cap and mid-cap segments are stretched after the recent liquidity-driven rally,” said Saurabh Jain, assistant vice president of research (retail equities) at SMC Global Securities.

SpiceJet fell 5.15% after reporting a second-quarter loss on Tuesday.

Ultratech Cement gained 2.11% and was among the top Nifty 50 gainers, after two brokerages identified the cement maker among its top picks in the sector.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Dhanya Ann Thoppil, Sonia Cheema and Janane Venkatraman)