BENGALURU, Sept 25 Reuters Indian shares closed nearly flat on Monday as gains in financial stocks offset the losses in the information technology sector, while casino operator Delta Corp plunged 19 after receiving a notice from the tax department.

The Nifty 50 and the SP BSE Sensex closed mostly unchanged at 19,674.55 points, and 65,958 points, respectively.

Both the Sensex and Nifty ended last week at their lowest in several months as the U.S. Federal Reserve39;s hawkish stance indicated prolonged period of elevated interest rates.

IT stocks fell 0.8 on fears of a delayed demand recovery in the U.S., from where it draws the bulk of revenue, due to higher interest rates. Last week, they fell 1.4.

HDFC Bank has been a major drag on the Nifty after it warned last week of near term weakness, while private bank stocks are not performing well, said AK Prabhakar, head of research at IDBI Capital.

The heavyweight bank index has fallen more than 3 in the past week, especially after HDFC Bank warned of a hit to key financial metrics following its merger with nonbanking twin HDFC Ltd.

The bank index closed slightly higher on Monday, while realty stocks gained after Reuters reported the government was considering a 7.2 bln housing loan interest subsidy scheme.

The realty index closed up 1.5.

More initial public offerings IPOs are also sucking liquidity from the markets, IDBI39;s Prabhakar said. There are 11 active IPO subscriptions ongoing as per exchange data.

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