By Bharath Rajeswaran
BENGALURU (Reuters) -Indian shares struggled for direction in a choppy session on Wednesday, ahead of a key U.S. inflation data that could influence the size of an expected reduction in Federal Reserve’s interest rates next week.
The Nifty 50 index held its ground at 25,044.55 points, while the S&P BSE Sensex was also flat at 81,940.16, as of 10:58 a.m. IST.
Both benchmarks indexes flitted in narrow ranges in early trade, after closing higher in the previous two sessions.
“Though the gains in the last two sessions suggest that bulls are attempting a comeback at near record-high levels, investors are cautious,” said Sameet Chavan, head of research at Angel One.
“Global market recovery is vital in guiding our markets direction from here on.”
Eight of the 13 major sectors logged losses. Auto stocks lost 0.8%, with Tata Motors dropping 4% to become the top laggard in the Nifty 50 and auto indexes.
UBS forecast a 21% slump for the Indian automaker over the next 12 months, citing weakening financials and high valuations.
The oil and gas sub-index shed nearly 1% after heightened concerns over softening global demand sent Brent crude futures on Tuesday to their lowest levels since December 2021.
While a drop in oil prices is generally a positive for crude importers such as India, a sharp dip on the back of weak demand forecast hurt prospects for global economy and added to investor caution ahead of a much-awaited U.S. inflation report, two analysts said.
The U.S. inflation data, due after India market hours on Wednesday, is expected to show inflation drifting closer to the Federal Reserve’s 2% target, which could prompt the U.S. central bank to opt for a 25-basis-point cut next week.
Consumer and pharma indexes rose 1% and 0.5%, respectively, with analysts attributing the rise to investor preference for defensives.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips and Sonia Cheema)
