India Stocks: Indian shares subdued as rising crude prices eclipse IT gains

Swiggy

Today 05:45

Updates for morning trade
By Bharath Rajeswaran
Oct 23 (Reuters) - Indian shares gave up early gains on Friday to extend losses into a fourth session, as surging oil prices on Middle East tensions outweighed gains in IT stocks, which rose after a global selloff in AI-linked shares.
The benchmark Nifty 50 .NSEI fell 0.70% to 22,529.15, and the Sensex .BSESN shed 0.39% to 72,964.13, as of 10:13 a.m. IST (0443 GMT). They had risen about 0.3% and 0.6% in early trade, before reversing their gains. 
The benchmarks lost about 2% in the last three sessions, with sentiment dampened by a rise in Brent crude oil futures LCOc1 to about $114 a barrel, on energy supply fears after attacks on top exporter Saudi Arabia by Yemen's Houthis. 
"Brent near $114 is a dominant risk for India," said Hariselvan Radhakrishnan, founder and CEO of HST Wealth, adding that oil is no longer just creating temporary pressure on sentiment, but could intensify inflation and hurt consumption and corporate profitability.
Fifteen of the 16 major sectors logged losses. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 lost 3.4% and 2.5%, respectively.
IT index .NIFTYIT jumped 1%, in contrast to the drop in tech stocks in Asia, after a more than 2% drop in the Nasdaq composite index .IXIC overnight.
Meta META.O shares lost nearly 8%, overnight on Wall Street, after the Facebook parent posted its first cash outflow in more than a decade due to its AI-related expenditure.
 Analysts view Indian IT stocks as a relative hedge against the global AI trade because they can benefit from companies' growing need for AI consulting, integration and managed-services work, while requiring far less upfront spending on data centres and chips than global hyperscalers.
Among stocks, Swiggy SWIG.NS tumbled 13%, with multiple brokerages flagging concerns over the company's ability to turn around its quick-commerce unit and margins in its food delivery business.
Colgate-Palmolive India COLG.NS lost 4.6% on concerns over a modest growth trajectory after the company posted a 4% rise in September quarter profit.
Cyient CYIE.NS jumped 7.5% after posting upbeat quarterly results.


 (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Ronojoy Mazumdar, Mrigank Dhaniwala and Jochelle Mendonca)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))