Indian stock markets retreated from early gains on Tuesday, driven by declines in the automotive and information technology (IT) sectors. The release of hotter-than-expected September inflation data dampened expectations of a domestic rate cut this year, negatively impacting investor sentiment. The Nifty 50 index fell 0.25 per cent to 25,068 points, while the S&P BSE Sensex dropped 0.2 per cent to 81,807 points. Data published on Monday revealed that rising food prices in September pushed India's retail inflation to a nine-month high. Economists warned that this could delay domestic rate cuts until early next year, instead of December. Ten out of 13 sub-sectors traded lower, with auto stocks experiencing a significant decline of 1.1 per cent. The prospect of delayed rate cuts spooked investors in this segment, which is heavily reliant on customers obtaining bank loans. IT stocks reversed their early gains and traded flat, while metals stocks declined by nearly one per cent. Deven Choksey, managing director of KR Choksey Group, commented that the markets were disappointed by the inflation data and the potential for further delays in rate cuts if price volatility persists. Reliance Industries, the second largest company on the Nifty 50, dropped 0.7 per cent after announcing a decrease in second-quarter profit. Inflation concerns overshadowed gains in oil marketing and paint companies due to a decline in global oil prices following reports that Israel may avoid striking Iranian oil facilities, reducing supply disruption fears. Lower oil prices are generally positive for India, the world's third-largest oil importer. State-run oil marketing firms such as HPCL, BPCL, and Indian Oil Corp rose by 3.5 per cent, 1.9 per cent, and 1.2 per cent respectively. Attribution: Reuters Subediting: Y.Yasser
