Sensex edges lower on inflation concerns; banks, IT stocks down

By Krishna V Kurup

REUTERS - Indian shares inched down on Tuesday, with markets taking a breather as the possibility of the central bank cutting interest rates next month was further dampened after retail inflation picked up to a seven-month high in October.

India's retail inflation grew 3.58 percent last month, government data showed on Monday, driven by faster rises in prices of food and fuel products.

"The likelihood of inflation testing the 4 percent target by late 2017 and staying above it for rest of 2018 reinforces our expectations that central bank will remain on hold in December and the rest of 2018," said Radhika Rao, Economist at DBS Group Research in a note.

The broader NSE Nifty was 0.26 percent lower at 10,198.85 as of 0608 GMT, while the benchmark BSE Sensex was down 0.23 percent at 32,958.95.

"Markets appear to be consolidating right now," said R. K. Gupta, Managing Director at Taurus Asset Management.

"Don't see any major downside or upsides in the market as of now, so I think at the end of the quarter markets will move in narrow ranges," he said.

Losses in IT stocks such as Tata Consultancy Services Ltd and banking stocks such as ICICI Bank Ltd offset gains in consumer stocks such as ITC Ltd.

ICICI Bank slipped 1 percent and Tata Consultancy Services fell 1.5 percent. ITC shares were 0.2 percent higher.

Bharti Infratel Ltd fell 4.2 percent after parent company Bharti Airtel Ltd's unit Nettle Infrastructure Investments Ltd said it was selling a stake in the mobile masts operator.

Repco Home Finance Ltd surged as much 14.1 percent to hit a two-month high after posting a 22 percent rise in September-quarter net profit.

(Reporting by Krishna V Kurup in Bengaluru; Editing by Biju Dwarakanath)