Indian Shares Give Up Early Gains As US-Iran Tensions Weigh

(RTTNews) - Indian shares gave up early gains to end little changed on Wednesday as investors weighed rising U.S.-Iran tensions and awaited key U.S. inflation data later in the day for fresh insights into market expectations for future interest rates in the face of rising energy-driven inflation risks.

Spot gold tumbled nearly 2 percent to $4,173.99 an ounce due to shifting interest rate expectations globally. U.S. gold futures were down 2.2 percent at $4,192.09.

Hopes for a U.S.-Iran peace deal and the reopening of Strait of Hormuz faded after the U.S. military launched fresh strikes against Iran in a very strong, powerful response to the downing of a U.S. Army Apache helicopter off the Oman coast.

It was said that U.S. fighter jets struck Iranian air defense systems and radar sites near the Strait of Hormuz.

Iran also launched missiles and drones toward U.S. targets in the region and warned that "heavier and broader" attacks would follow if the United States continued aggression against Iran.

Meanwhile, analysts estimate that the U.S. inflation rate may have climbed to 4.2 percent in May, which could be its highest level in three years in the face of increased living costs.

The European Central Bank meets on Thursday, with economists expecting the central bank to hike interest rates amid spiking energy prices.

The benchmark BSE Sensex ended up 64.42 points at 73,983.18, after having hit a high of 74,613 earlier on the back of stable crude oil prices and signs of increased FPI buying in the Indian bond markets following the government's decision to offer tax relief on debt investments.

The NSE Nifty index hit an intraday high of 23,425 before reversing course to settle 27.15 points, or 0.12 percent, lower at 23,214.95.

The BSE mid-cap and small-cap indexes lost 1.4 percent and 1.1 percent, respectively. The market breadth was weak on the BSE, with 2,740 shares falling while 1,475 shares advanced and 154 shares closed unchanged.

Infosys, NTPC, Bharti Airtel, Mahindra & Mahindra, HCL Technologies, Titan Company, Bajaj FinServ, Tata Steel and Eternal fell 1-2 percent while Hindustan Unilever, Axis Bank and Kotak Mahindra Bank all rallied around 2 percent, helping limit overall losses in the broader market.