India stocks-Indian shares flat as IT, oil slide counter broad losses

A 3.3% rise in Indian IT stocks offset broader losses, as the sector's limited pure-play AI exposure insulated it from an AI capex-driven tech selloff in other global markets.

"The retreat in the AI frenzy globally creates room for India's battered IT sector to find its footing," said Gaurav Kulshreshtha, chief investment officer at Nexedge Capital.

"However, fundamental headwinds remain for large-cap IT and global tech spends need to materially improve for any sustained recovery."

The sub-index has risen 5.7% in two sessions after Jefferies upgraded the sector to "neutral" from "underweight."

The gains come ahead of the Fed's policy decision on Wednesday, when it is widely expected to keep interest rates unchanged.

Investors will closely watch the central bank's assessment of the Iran war's potential inflationary impact on the U.S. economy.

Brent crude fell 2.7% to about $86 a barrel, extending an 8.7% slide from the previous session, after U.S. President Donald Trump said Washington was holding "good talks" with Iran and a resolution was possible.

"The base case as evident in the current oil prices is for the conflict to settle. If that happens, India would become an attractive trade again, for foreign institutional investors," Nexedge's Kulshreshtha said.

Ten of 16 major sectors declined.

The broader small-caps fell 0.2%, while mid-caps rose 0.1%.

Among stocks, consumer major Hindustan Unilever fell 7%, their worst session in over six years, after posting a lower quarterly profit. Coal India fell 4.1% on a June quarter profit miss. Coforge jumped 10.3% on first-quarter profit jump.