INDIA STOCKS-India's stock benchmarks flat as financials offset trade deal hopes; HDB Financial debuts strong

By Bharath Rajeswaran and Vivek Kumar M

July 2 (Reuters) - Indian equity benchmarks traded flat on Wednesday as financial stocks pulled back from near-record highs, offsetting optimism over a possible U.S. trade deal, while HDB Financial Services, the year's largest IPO, debuted at a 13% premium.

President Donald Trump said on Tuesday the U.S. could reach a trade deal with India, which could help the South Asian country avoid the 26% reciprocal levy he announced on April 2 and has paused until July 9.

The Nifty 50 .NSEI was down 0.08% at 25,521.55 points and the BSE Sensex .BSESN fell 0.03% to 83,675.62 points, as of 10:14 a.m. IST.

HDB Financial Services HDBF.NS debuted at 835 rupees on the National Stock Exchange of India, a premium of 12.84% to its issue price of 740 rupees.

Eleven of the 13 major sectors declined, with index heavyweights HDFC Bank HDBK.NS and Reliance Industries RELI.NS losing about 0.5% each.

The broader mid- .NIFMDCP100 and small-caps .NIFSMCP100 fell 0.5% and 0.3%, respectively.

Positive news about the trade deal with the U.S. may boost Nifty, but sustaining gains could be difficult at higher levels without indications of a strong earnings rebound, said V.K. Vijayakumar, chief investment strategist at Geojit Financial Services.

U.S. Treasury Secretary Scott Bessent also indicated that both nations are nearing an agreement that would help India avoid sharp tariff increases.

Information technology companies .NIFTYIT, which earn a significant share of their revenue from the U.S., rose 1.4%, while financials .NIFTYFIN fell 0.5% and was on course for a third session of losses after hitting a record high on Friday.

Private lender IndusInd Bank INBK.NS and credit card services provider SBI Card SBIC.NS fell 3% and 2.5%, respectively, after Goldman Sachs' downgrades.