By Tanvi Mehta
(Reuters) - Indian shares fell marginally after briefly hitting fresh highs on Thursday as domestic investors exercised caution and refrained from making big bets amid escalating trade war tensions and as oil prices jumped 3 percent.
Asian shares slipped as a deadline loomed for fresh U.S. tariffs on China with speculation that U.S. President Donald Trump's political position could be threatened by the legal woes of two former advisers.
Oil prices further dampened sentiment, with Brent crude futures hitting a three-week high after U.S. government data showed a larger-than-expected draw in inventories and as Washington's sanctions on Iran signalled tightening supplies.
"Higher crude prices are affecting lenders and oil marketing companies. The jump today (in oil prices) has been massive ... Pharma stocks are the only positive in the markets today," said AK Prabhakar, head of research at IDBI Capital, adding that trade war tensions also weighed on the sentiment.
The broader NSE Nifty was down 0.09 percent at 11,560.25 as of 0551 GMT.
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The benchmark BSE Sensex was 0.04 percent lower at 38,270.16.
State-run banks were the top drag. The Nifty PSU Bank index fell as much as 2.6 percent. The Bank of India was down 3.2 percent while the State Bank of India, the Oriental Bank of Commerce and the Canara Bank dropped more than 2 percent each.
Shares of oil marketing companies fell, with Indian Oil Corp and Hindustan Petroleum Corp Ltd losing 3 percent each.
Nifty Pharma index was trading 1.3 percent higher. Divi's Laboratories was the top percentage gainer, after HSBC Global Research upgraded stock to 'buy' and raised PT to 1395 rupees.
Indian markets were closed on Wednesday on account of a public holiday.
(Reporting by Tanvi Mehta in Bengaluru; Editing by Gopakumar Warrier)
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