Indian shares erase early losses led by Ultratech, Maruti

(Reuters) -Indian benchmark indexes were muted on Monday, as gains in cement maker Ultratech and carmaker Maruti Suzuki offset broader losses due to concerns over domestic economic growth and its effect on the central bank’s monetary policy decision.

The NSE Nifty 50 shed 0.04% at 24,121.4 points, as of 10:48 a.m. IST, while the BSE Sensex shed 0.14% to 79,695.27.

Both the benchmarks fell about 0.5% at the open before erasing losses.

Data released late Friday showed that India’s economic growth decelerated more than anticipated in the third quarter, hindered by slow momentum in manufacturing and consumption. The data is likely to increase pressure on the Reserve Bank of India to lower its interest rates and dampen market sentiment.

The RBI is expected to hold rates at its meeting on Dec. 6.

“Gross domestic product (GDP) data confirms significant economic growth deceleration and will likely weigh on markets,” said analysts led by Bharat Arora of Ambit Capital.

India’s benchmark indexes slipped into correction territory in November, hurt by a moderation in earnings growth and foreign selling.

“Expect more legs to the correction with acceleration in downgrades in the upcoming results season while valuations remain rich,” Ambit Capital said.

Seven of the 13 major sectors logged losses.

Cement manufacturer Ultratech Cement rose 2.7% and was the top Nifty 50 gainer after Jefferies picked the company as its top pick among large-cap cement companies.

Car maker Maruti Suzuki rose 2% after reporting a 10.4% rise in sales volume in November. Maruti led the auto index 0.5% higher.

The pharma index rose 1%, while the realty index gained 1.4%.

The broader, more domestically focused small-cap and mid-cap indexes rose 0.7% and 0.4%, respectively, outperforming the benchmarks.

Dixon Technologies jumped 6.2% after announcing that it would launch mass production of Google Pixel smartphones.

Cochin Shipyard gained 5% after signing a contract worth 10 billion rupees ($118.06 million) with the ministry of defence.

Dixon and Cochin Shipyard were among the top gainers in the broader markets.

($1 = 84.7030 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio D’Souza, Sherry Jacob-Phillips and Abinaya Vijayaraghavan)