Indian shares marginally up; inflation concerns cap gains

Fresh worries about inflation and the OPEC+'s move to cut more production capped gains for Indian shares, which were just starting to shake off fears of a contagion in global banking.

The Nifty 50 index (.NSEI) closed 0.22% higher at 17,398.05 on Monday. The S&P BSE Sensex (.BSESN) rose 0.19% to 59,106.44.

Indian markets will remain closed on Tuesday for a local holiday.

Nine of the 13 major sectorial indexes advanced, with auto stocks (.NIFTYAUTO) rising 1.5% on strong March sales. SML Isuzu (SMLI.NS) jumped 20% after passenger vehicle sales more than tripled in March.

Inflation concerns soured sentiment on a sharp rise in crude oil prices after Saudi Arabia and other oil-exporting countries announced a surprise production cut over the weekend.

The cuts imply tightening of oil markets in the second half of 2023 and is a "negative for India as a whole and oil marketing companies in particular," analysts at Kotak Institutional Equities said in a note.

Bharat Petroleum Corporation of India (BPCL.NS) and Hindustan Petroleum Corporation of India (HPCL.NS) fell over 4% each.

Most Adani Group stocks also declined.

India's market regulator is investigating a possible violation of "related party" transaction rules in the conglomerate's dealings with at least three offshore entities linked to the brother of group founder Gautam Adani, Reuters reported, citing two people.

On the other hand, shares of PNB Housing (PNBH.NS) jumped over 5% after global brokerage Morgan Stanley reiterated "overweight", citing lower funding costs.

Investors are also cautious ahead of the Reserve Bank of India's rate decision due on April 6, said two analysts.

The RBI is likely to raise its main interest rate by 25 basis points and then pause for the rest of the year, according to a Reuters poll of economists.

Reuters