Indian shares fall

Indian shares erased early gains and closed slightly lower on Friday, dragged down by steel companies such as Tata Steel Ltd as investors kept to the sidelines due to a lack of clarity on the US tariff on steel and aluminium imports. The benchmark BSE index dropped 0.13 percent to 33,307.14 and the broader NSE index slipped 0.15 percent to 10,226.85, marking their seventh session of falls in eight.
Both indexes shed 2.2 percent this week, in their second straight weekly fall. State-run banks were among the biggest laggards with Union Bank of India Ltd closing 2.9 percent lower after Reuters reported that the bank has $45 million direct exposure to firms owned by jeweller Nirav Modi, and Gitanjali group of companies.
Domestic shares tracked broader Asia which rallied on news of the first US- North Korea summit after Kim Jong Un offered to stop nuclear and missile testing. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.56 percent.
However, analysts feel that domestic markets have largely discounted global cues, but added that the uncertainty around the tariff on steel and aluminium imports proposed by Trump could have a short-term impact on steel companies. "I would definitely avoid steel stocks at the moment because of global uncertainties but also the valuations are too high," said Rudramurthy, managing director at Vachana Investments. Steel Authority of India Ltd and Tata Steel Ltd were down 4.4 percent and 1.7 percent, respectively.
Trump on Thursday set import tariffs of 25 percent on steel and 10 percent on aluminium, but exempted Canada and Mexico and offered the possibility of excluding other allies. "I would bet on IT stocks, especially mid-caps, because valuations are low and strong earnings are expected," Rudramurthy added. The Nifty IT index was up 0.6 percent with Tech Mahindra trading 1.6 percent higher. Tata Consultancy Services Ltd was up 0.8 percent. Construction firm H.G. Infra Engineering Ltd fell as much as 6.4 percent to 252.70 rupees on its market debut.
GTL Infrastructure Ltd hit lower circuit of 20 percent after the company said the impact of Aircel's insolvency will be materially adverse for the company.