Indian shares shed gains as traders seek clarity on US economy

India's benchmark indexes surrendered early gains to trade flat on Thursday as investors held safe ranges awaiting further clarity on the health of the US economy.

The Nifty 50 index held its ground at 25,201.35 points, while the S&P BSE Sensex was also flat at 82,333.5, as of 10:26 a.m. IST.

Weak US labour market data and comments from a key Federal Reserve official bolstered the case for an aggressive interest rate cut on Sept. 18, with the odds of a 50-basis-point reduction rising to 45 per cent from 38 per cent a day before.

Emerging markets such as India see a rise in foreign fund inflows from US interest rate cuts.

"Weak economic data has added to concerns about potential slowdown in the US economy, which is weighing on domestic equities," said Vinod Nair, head of research at Geojit Financial Services.

Market participants in India are likely to take a breather after a recent rally until further clarity on the US economy, as there is no room for a sharp upside, two analysts said.

The Nifty 50 snapped its longest winning streak of 14 days on Wednesday, after having gained about 5 per cent during the period and marked record-high levels.

Other Asian markets rebounded on Thursday, with the MSCI Asia ex-Japan index gaining 0.4 per cent after a nearly 2 per cent slump in the previous session.

Seven of the 13 major sectors logged marginal gains.

The broader, more domestically focussed small- and mid-caps gained about 1.2 per cent and 0.3 per cent, respectively, to all-time highs.

Among individual stocks, Linde India jumped 3.7 per cent on a plant sale deal with the industrial gas supply assets of Tata Steel .

Shares of Zomato jumped 6 per cent after JPMorgan raised its price target to 340 rupees apiece from 208 rupees, citing support from Blinkit.