Indian shares dip as financials drag; HDB Financial surges 13.6% on debut

By Bharath Rajeswaran and Vivek Kumar M

Indian shares edged lower on Wednesday as financials retreated from recent highs, overshadowing optimism over a potential India-US trade deal, while HDB Financial Services, the year's largest IPO, surged on debut.

The Nifty 50 fell 0.35 per cent to 25,453.40 and the Sensex slipped 0.34 per cent to 83,409.69.

President Donald Trump said on Tuesday the US was close to finalising a trade agreement with India, which could help the country avoid a 26 per cent reciprocal tariff announced in April and paused until July 9.

"Investors aren't buying into Trump's sound bites anymore. Indecision will prevail in markets until there's a deal signed, sealed, and delivered," said Sanjeev Hota, vice president and head of research of wealth management at Mirae Asset Sharekhan.

"Besides, if the US fumbles on broader trade negotiations with other key trading partners, it could ripple through inflation, rates, and global risk sentiment," Hota added.

Nine of the 13 major sectors declined, with index heavyweights HDFC Bank and Reliance Industries losing 1.3 per cent and 0.6 per cent, respectively.

HDB Financial Services debuted at a premium of about 13 per cent to its issue price and closed its maiden session 13.6 per cent higher.

The broader mid- and small-caps fell 0.4 per cent and 0.1 per cent, respectively.

High-weight financials fell 1 per cent, retreating for a third straight session from record highs hit on Friday, while banks dropped 0.8 per cent.

Private lender IndusInd Bank and credit card services provider SBI Card fell 2.4 per cent and 2 per cent, respectively, after Goldman Sachs' downgrades.

Realty index dipped 1.4 per cent, taking its losses over the last five sessions to about 5 per cent.

Consumer companies Colgate Palmolive India and Dabur rose following an NDTV report that the government may scrap the 12 per cent GST slab and reclassify items like toothpaste into the lower 5 per cent bracket.

Meanwhile, cigarette makers ITC and Godfrey Phillips declined on concerns that luxury and sin goods could face higher GST rates under the proposed restructuring.