July 7, 2020 / 5:40 AM / a month ago

Indian shares run out of steam after 4-day rally, surging virus cases weigh

BENGALURU, July 7 (Reuters) - Indian shares traded little changed on Tuesday after a four-session rally as COVID-19 cases climbed unchecked, with losses in energy firms wiping out gains notched by finance and IT stocks.

The NSE Nifty 50 index was down 0.02% to 10,761.45 by 0512 GMT, while the benchmark S&P BSE Sensex was up 0.06% at 36,510.87. Both indexes gained around 4.5% in the last four sessions, hitting their highest in four months.

Coronavirus cases in the world’s second-most populous country jumped to 719,665 by Tuesday morning, including 20,160 deaths, health ministry data showed. India on Monday overtook Russia to become the third-most affected country by the novel coronavirus.

“Markets need a breather, and of course, there is nervousness after such a stellar rally as you don’t want to be the last to cash in,” said Ajay Bodke, chief executive officer and chief portfolio manager (PMS) at Prabhudas Lilladher in Mumbai.

The Nifty has rallied more than 40% from a four-year low hit in March, when virus fears had gripped markets.

“In a market that has been rallying purely on momentum in the absence of solid fundamentals, any whiff of decelerating momentum indicators will dampen sentiment significantly,” said Bodke.

Sentiment was also tempered as Asian stocks hit a speed bump following their recent rally.

Power Grid Corporation of India Ltd was the biggest loser on the Nifty, falling as much as 3.5% to a more than two-week low, while refiner BPCL slid 3.1%.

The Nifty Energy Index dropped as much as 1.5%.

Heavyweight shadow lender Bajaj Finance Ltd was among the top boosts to the Nifty, jumping 4.3% to its highest level since mid-March, after it said assets under a moratorium provided by the central bank had fallen at June-end.

IT firm Infosys Ltd rose as much as 3.6% to its highest since Feb. 26, pushing the Nifty IT index 2.2% higher. (Reporting by Chris Thomas in Bengaluru; Editing by Subhranshu Sahu)

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