BENGALURU - Indian shares fell on Friday, amid weakness in auto and real estate stocks, as uncertainty around the U.S.-China trade negotiations and rising oil prices outweighed investor euphoria around the U.S. Federal Reserve's hints at future rate cuts.
Both auto and realty indexes lost over 1% after the Business Standard daily reported on Friday that these companies were unlikely to get some tax relief on input materials.
The broader NSE Nifty was lower by 0.37% at 11,788.35 as of 0349 GMT, while the benchmark BSE Sensex was down 0.37% at 39,456.18. The volatility index was up 1.13%.
Technical charts indicate that the NSE Nifty is biased to test a support at 11,731.32 before further gains.
Fresh worries about tensions in the Middle East after Iran shot down a U.S. military drone pushed crude prices to their first weekly gain in five weeks, leaving Asian stocks teetering. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1%.
Back home, auto stocks were also under pressure as companies battle production cuts and slowing demand for passenger vehicles.
Tata Motors was among the top losers on the Nifty, falling 2.7% in early trade after Moody's downgraded its arm Jaguar Land Rover's rating.
Maruti Suzuki's shares were also among Nifty's top losers after it warned of price increases on one of its top-selling cars, as it copes with new emission norms.
"Demand in the auto sector is not showing any uptick. So, all the players are looking at the budget to revive demand," said Anita Gandhi, Whole-time Director at Arihant Capital Markets.
"It is very challenging for the automakers because of the emission norms and price increases as well."
Among other sectors, banks traded lower, with the Nifty private banking index falling over 0.5%.
Oil marketing companies Indian Oil Corp and Bharat Petroleum Corp too were among the top losers, shedding over 1% each.
Meanwhile, Dewan Housing Finance Ltd was up over 3% after the Mint newspaper reported that the company had offloaded 20 billion rupees ($287.05 million) worth of debt to foreign investors.