BENGALURU: Indian shares closed flat on Monday, as gains in energy and metals stocks, on a cut in windfall tax on crude and a soft U.S. dollar, respectively, were offset by profit booking in financials.

The NSE Nifty 50 index rose 0.13% to 24,572.65, and the S&P BSE Sensex shed 0.02% to 80,424.68.

“We may continue to see some more time correction for benchmarks as some market participants who missed booking profits earlier are keen…,” said Abhishek Goenka, founder and CEO, IFA Global.

Both benchmarks dropped about 2% each from record high levels hit on Aug. 1.

“Overall, the results season has been satisfactory but for current valuations to remain justified, we cannot afford a slowdown in earnings momentum,” Goenka added.

Nine of the 13 major sectors logged gains. Energy and oil & gas rose about 1.33% and 1.52%, respectively.

Indian shares rise led by energy stocks

Oil & Natural Gas Corp rose about 1.75%, with other oil upstream companies such as Oil India and Mangalore Refinery gaining 1.75% and 3.82%. The government cut the windfall tax on crude to 2,100 Indian rupees ($25) per tonne from 4,600 rupees with effect from Aug. 17.

Metals gained 1.87%, helped by a soft U.S. dollar on expectations that the U.S. economy would avoid a recession. A weaker U.S. dollar makes metals cheaper for holders of other currencies.

Financials and private banks dropped about 0.25% and 0.5%, respectively, and weighed on index gains.

“Net interest margins of banks have stabilised at low levels in the June quarter, while credit costs have risen with corporate commentary alluding to early signs of stress in retail sector,” said analysts at Nuvama.

Small-caps and mid-caps gained 1.7% and 0.2%, respectively.

Ola Electric rose 10%, surging about 93% since its market debut earlier this month. CLSA said the company’s entry-level e-motorcycles can gain market share in a segment dominated by Hero MotoCorp and Honda.