Reliance weighs on Indian shares ahead of key cenbank meetings

BENGALURU, July 24 (Reuters) - Indian shares were marginally lower on Monday, dragged by index heavyweight Reliance Industries after its quarterly results and the caution in global equities ahead of key central bank meetings later this week.

The Nifty 50 (.NSEI) index dipped 0.06% to 19,733.90 as of 9:38 a.m. IST, while the S&P BSE Sensex (.BSESN) lost 0.07% to 66,648.45.

Asian equities also dropped ahead of the U.S. Federal Reserve and European Central Bank monetary policy meetings.

While markets have fully priced in a 25-basis-points rate hikes by both central banks, the Feds commentary will be crucial for cues into its rate trajectory, analysts say.

Six of the 13 major sectoral indexes logged losses, with oil and gas stocks (.NIFOILGAS) falling 0.8%, dragged by Reliance Industries.

“We believe the markets could correct another 4% in the very short term,” said G Chokkalingam, managing director - research at Equinomics Research Pvt Ltd.

“Such a correction would be good for the markets after the recent rally from an overall valuation and liquidity point of view.”

Reliance (RELI.NS) fell 2.5%, the most on the Nifty after 50 after posting a bigger-than-expected drop in quarterly profit, on weakness in its flagship oil-to-chemicals (O2C) business.

“After the recent run-up in Reliance Industries ahead of the Jio Financial Services demerger, near-term upside is limited,” said Anil Sharma and Aditya Bansal, analysts at Kotak Institutional Equities.

Private lender Kotak Mahindra Bank (KTKM.NS) lost over 2% despite reporting a larger-than-expected rise in June-quarter profit. The stock had gained over 3.5% in the last three sessions.

Helping cap losses was a 0.43% gain in IT stocks (.NIFTYIT), following their over 4% slide on Friday after Infosys (INFY.NS) slashed its guidance. Infosys gained 0.42% and was among the top Nifty gainers.