Indian shares end flat

Indian shares ended mostly unchanged on Monday as losses in auto and information technology stocks were offset by gains in banks, after strong results from ICICI Bank drove other lenders higher.

The blue-chip NSE Nifty 50 index (.NSEI) ended up 0.06 per cent at 18,125.40, while the benchmark S&P BSE Sensex (.BSESN) rose 0.2 per cent to 60,967.05.

ICICI Bank (ICBK.NS) rose as much as 14.2 per cent to an all-time high and helped the Nifty bank index (.NSEBANK) reach a fresh peak, after the lender posted an about 25 per cent jump in quarterly profit on Saturday.

The bank index rose 2.2 per cent, while the auto index (.NIFTYAUTO) and the IT sub-index (.NIFTYIT) fell 1.8 per cent and 1.1 per cent, respectively.

The Nifty mid-cap index (.NIFMDCP100) was down 1.7 per cent, while the small-cap index (.NIFSMCP100) dropped 3 per cent.

Analysts said the fall in small- and mid-cap stocks indicated retreating flows from retail investors after getting caught in a correction last week amid fears of higher valuations

The Nifty mid- and small-cap indexes fell more than 4 per cent and 5 per cent, respectively, last week.

Nomura on Monday downgraded India equities to "neutral" from "overweight", citing unfavourable risk-reward due to higher valuations and said a number of positives appear to have been priced in.

Meanwhile, the Nifty bank index has gained over 10 per cent so far this month, outperforming a near 3 per cent gain in benchmark indexes.

"This outperformance is justified by the bank results so far and the trend may continue since there is valuation comfort in the banking segment in an otherwise overvalued market," said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

Domestic institutional investors sold $600 million worth of equities in capital markets last week, while foreign investors offloaded about $343 million, Refinitiv data showed.