Indian shares end flat as L&T counters Axis Bank, Nestle results

The new logo of the Bombay Stock Exchange (BSE) building is seen in Mumbai·Reuters
Manvi Pant and Bharath Rajeswaran
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By Manvi Pant and Bharath Rajeswaran

BENGALURU (Reuters) -Indian shares ended little changed on Thursday, as gains in Larsen and Toubro offset the drag from weaker-than-expected results by Axis Bank and Nestle India.

The NSE Nifty 50 slipped 0.03% to 24,406.1 points, while the S&P BSE Sensex settled 0.14% lower at 80,039.8.

Axis Bank retreated 5%, the most on the Nifty, after reporting a smaller-than-expected quarterly profit.

This also dragged the bank, financial services and private bank indexes down by 0.5%-1%.

Overall, eight of the 13 major sectors declined, while the broader small- and mid-caps were down 0.2% and 0.3% respectively.

Analysts also attributed the drop in financials to likely foreign selling, as foreign portfolio investors have a higher ownership in the sector compared to other segments.

Foreigners have already net sold Indian shares worth about $1 billion over the last two sessions.

Meanwhile, consumer goods maker Nestle India dropped 2.4% after missing first-quarter revenue and profit estimates.

However, a 2.8% rise in shares of Larsen and Toubro limited declines, after its first-quarter revenue and profit beat estimates.

The pace of the Nifty's retreat from a record-high last week has accelerated since the budget on Tuesday, in which the government hiked tax on derivatives trading and on profits from equity trading.

"While the increase in short-term capital gains tax is understandable, given the need to curb excessive short-term speculation, the increase in long-term capital gains is regressive, especially the optics of it," said Abhishek Goenka, founder and CEO of treasury and wealth management firm IFA Global.

The Nifty volatility index rose to 12.62, on the day of monthly expiry of derivatives contracts, which two analysts said was likely due to market participants cutting or rolling over their derivatives positions.

(Reporting by Manvi Pant and Bharath Rajeswaran in Bengaluru; Editing by Nivedita Bhattacharjee, Savio D'Souza and Varun H K)