India’s main stock markets went slightly down on Thursday because financial companies, which have a big influence, fell in value. This happened as the global stock market rally, helped by better U.S.-China trade talks, took a break.
The Nifty 50 index dropped by 0.41% to 24,566.7, and the BSE Sensex went down 0.47% to 80,937.53 by 10:29 a.m. Indian time. Out of 13 major sectors, 11 saw their stocks fall. The financial sector fell by 0.5%.
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The three biggest companies in the Nifty—HDFC Bank, ICICI Bank (both private banks), and Reliance Industries (which works in oil and telecom)—each lost about 0.6% of their value.
Ajit Mishra, a senior research expert at Religare Broking, said the recent drop and profit-taking shows investors are becoming more cautious after the recent rise in stocks.
In the past three days, Nifty and Sensex went up about 2.5%, reaching their highest levels in seven months on Tuesday. This rise happened because tensions between India and Pakistan eased, and U.S.-China trade talks improved.
Small and mid-sized company stocks went up by 0.4% and 0.2% respectively on Thursday. This week, small-cap stocks have gained 7%, and mid-cap stocks have gained 5.7%.
VK Vijayakumar, chief investment strategist at Geojit Investments, said that if investors start selling Indian big companies to buy Chinese stocks after the trade deal, it could slow down big companies’ growth. This might help mid and small companies continue to grow.
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Overnight, the U.S. stock market ended mixed after a strong rally earlier this week. U.S. government bond rates stayed high. Asian markets were quiet, with the MSCI Asia ex-Japan index staying flat after a 1.5% gain on Wednesday.
Investors are waiting for a speech from the U.S. Federal Reserve Chairman Jerome Powell for clues about future interest rates.
Hero MotoCorp’s shares rose 2%, leading the gains on the Nifty. The company recently announced two affordable electric vehicles and expects better monsoon rains to increase demand in rural areas.
Metal stocks also rose by 0.9%, adding to a 2.5% gain from the previous day.
