Shares settle flat as financials offset losses in energy, consumer stocks

Indian shares were largely unchanged on Tuesday as a rise in financials offset a drop in energy and consumer stocks, while a global rally fuelled by hopes of an imminent US rate cut came to a standstill on escalating tensions in the Middle East.

The NSE Nifty 50 index added 0.03 per cent to 25,017.75. The S&P BSE Sensex rose 0.02 per cent to 81,711.65.

Both the benchmarks traded in a narrow range between 0.2 per cent losses and 0.3 per cent gains. They are less than 0.5 per cent shy off all-time highs hit on August 1.

The Nifty 50, which has added about 3.6 per cent in nine sessions, its longest daily winning run in 16 months, came within five points of a record high.

"Liquidity remains strong as domestic inflows have far exceeded foreign outflows, providing a cushion to markets," said Amnish Aggarwal, director of institutional research at Prabhudas Lilladher.

The liquidity surplus has not only lent resilience to domestic markets, but also overpowered the selling pressure despite high valuations, analysts said.

Domestic institutional investors have been buyers for 16 straight sessions, purchasing Indian stocks worth Rs 48,614 crore ($5.8 billion).

Asian stocks slipped, while rising tensions in the Middle East and supply concerns checked risk sentiment.

Brent crude prices held their ground after jumping 7 per cent in the past three sessions due to Mideast escalations.

Higher oil prices hurt net importers like India, where crude contributes a significant share of the country's import bill and could raise inflation.

Meanwhile, consumer stocks shed about 1 per cent, dragged by Hindustan Unilever, which lost 2 per cent after a $115 million income tax demand.

The energy index shed 0.61 per cent on elevated crude prices and was among the top sectoral losers.

In contrast, financials gained 0.82 per cent, with analysts terming the sector as the only pocket with some degree of valuation comfort.

Zee Entertainment Enterprises surged 11.6 per cent, sending media index 4.1 per cent higher after it settled merger disputes with Sony and BEPL.