Indian stocks end lower as tech stocks drag

Indian shares closed lower on Thursday for a third straight session as losses in technology stocks outweighed gains in banks, while Asian Paints fell over 5 per cent after higher raw materials costs dented profit, highlighting inflation concerns.

The NSE Nifty 50 index fell 0.5 per cent to 18,178.10, while the S&P BSE Sensex dropped 0.6 per cent to 60,923.

The Nifty IT index was the top drag among the sectoral indexes, falling 2.5per cent.

Positive global cues are likely to be overwhelmed by domestic concerns like high valuations that have become unsustainable and rising commodity inflation, which will impact the margins of firms, said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

Shares of Asian Paints fell 5.3 per cent after the company’s profit was hurt by a near 50 per cent jump in total expenses, including a 72.7 per cent rise in cost of materials consumed.

Analysts said the Indian market was seeing consistent selling from institutional investors, concerned over higher valuations.

Domestic institutional investors sold $1.03 billion worth of securities in Indian capital markets in the past one week, Refinitiv data showed.

Nifty trades at a price-to-earnings ratio of 22.8 times forward earnings estimates, according to Refinitiv Eikon data, indicating a stretched valuation.

The Nifty bank index rose 1.3 per cent, while the public sector bank index gained 2.7 per cent on expectations of strong results during the quarter for lenders.

Bank of Maharashtra rose as much as 9per cent after its quarterly profit doubled and asset quality improved.

Future Retail fell 4 per cent after a Singapore panel ruled that the retailer must take part in arbitration over a commercial dispute with Amazon.com Inc

Department store chain Shoppers Stop rose as much as 20 per cent on a smaller loss in the September quarter.