Indian shares struggle on weak global cues, higher crude prices

BENGALURU, Sept 28 (Reuters) - Indian shares struggled to add to initial gains on Thursday as weakness in global equities markets over fears of higher interest rates and surging crude prices weighed.

The Nifty 50 (.NSEI) was mostly unchanged at 19,706 points as of 10:42 a.m. IST, while the S&P BSE Sensex remained flat at 66,076 points. The benchmarks opened 0.2% higher.

“Despite the correction, India has still outperformed the global markets.. But, we are also seeing many emerging risks like higher crude prices and depreciation in rupee,” said Samrat Dasgupta, chief executive at Esquire Capital Investment Advisors.

Surging U.S. Treasury yields and the dollar on fears that interest rates will remain higher for longer has been weighing on the global equity markets since the Federal Reserve struck a hawkish tone earlier in the month.

Crude prices, which rose 3% overnight will hurt India, the worlds third-largest importer, which is also reeling under lower-than-expected monsoon rains, triggering inflation risks.

Meanwhile, the domestically focused stocks, small-caps (.NIFSMCP100) and mid-caps (.NIFMDCP100) added 0.7% and 0.1%, respectively.

“Corporate results this season is expected to be good this quarter except for information technology. It looks like a buy on dips market,\” Esquires Dasgupta said.

Among sectoral indexes, information technology stocks (.NIFTYIT) fell 0.8%, metals (.NIFTYMET) gained 0.6%, while the public sector banks (.NIFTYPSU) climbed 0.9%.

Rise in crude prices pushed state-run explorer Oil India (OILI.NS) higher by 3%, while insurer ICICI Lombard (ICIL.NS) slipped 2% after it got a show cause cum demand notice from Indias good and services tax department demanding 17.29 billion rupees.