BENGALURU: Indian shares gave up most of their early gains on Wednesday, taking cues from broader Asian markets, as they reacted to U.S. data showing consumer confidence in the world’s biggest economy had dropped to a six-year low.
Indian markets have rallied in recent weeks, boosted by positive commentary from companies and more recently, enthusiasm around potential COVID-19 treatments.
The NSE Nifty 50 index was up 0.10% at 11,483.60 by 0545 GMT, while the S&P BSE Sensex was 0.02% higher at 38,847.65. Both indexes have risen more than 3% so far this month.
Telecom firm Bharti Airtel was down 2%, after rising 0.3% on Tuesday. IT services firm Tata Consultancy Services was down 1%. The stocks were the top two drags on the Nifty 50.
U.S. consumer confidence fell in August as households worried about the labor market and incomes, while coronavirus cases continued to rise in many countries.
Of the 12 sectoral indexes, auto stocks were a bright spot, rising the most with a 1.5% climb after Finance Minister Nirmala Sitharaman said the goods and services tax rates on two wheelers merited a revision.
Hero Moto Corp, Bajaj Auto, Eicher Motors and TVS Motor, all prominent manufacturers of two-wheeler vehicles, rose between 1.9% and 4.8%.
Automakers in India have argued for temporary tax cuts on vehicles, to try to boost sales and generate revenue after the coronavirus outbreak hit demand.
“It might take time for the proposal to get accepted by the GST council, nonetheless this is very positive news for the industry,” said Suraj Ghosh, principal analyst, powertrain & compliance forecasts at IHS Markit. “When the GST comes down, it will have a very direct impact on consumption.”