BENGALURU, May 17 (Reuters) –
Indian shares fell on Friday as a drop in financials and
information technology stocks overshadowed gains in auto stocks,
while a global rally triggered by hopes of U.S. interest rate
cuts cooled down.
The blue-chip NSE Nifty 50 shed 0.18% to 22,366.05
points, while the S&P BSE Sensex dropped 0.19% to
73,523.22, as of 9:48 a.m. IST.
Seven of the 13 major sectors logged losses. The two
heaviest sectors – financials and IT index
dropped about 0.5% each.
Analysts attributed the drop in high weightage
financials to high foreign investors’ ownership in the sector.
Foreign portfolio investors (FPIs) selling in Indian
shares is at a 16-month high in May.
The drop in U.S. rate-sensitive IT stocks comes after data
showed a fall in weekly jobless claims on Thursday, indicating a
tight labour market while a rise in U.S. import prices signalled
persistent price pressures.
The data dampened hopes of early rate cuts on
cooler-than-expected inflation data for April, which spurred a
1.66% rise in the sector in the previous session.
“The pressure on the markets is mainly due to sustained
foreign selling,” said Pramod Gubbi, co-founder of Marcellus
Investment Managers.
“Global money is going to other emerging markets like
China, which are trading at a significant discount to India.
Besides investors are still re-calibrating the timing of U.S.
rate cuts on mixed data on the U.S. economy,” Gubbi added.
Auto stocks jumped 2% to an all-time high.
Mahindra & Mahindra surged 7% to a record
high. The auto maker’s stock had risen 3% in the previous
session, on
beating
the March quarter profit view.
While the benchmarks were subdued, the broader,
more-domestically focussed small- and mid-caps
were up 0.8% and 0.4%, respectively.
Endurance Tech, Triveni Turbine,
Info Edge, Dixon Technologies and Kaynes
Technologies surged between 5.5% and 12%, on the back
of strong March quarter results, and led the gains in broader
markets.
(Reporting by Dimpal Gulwani and Bharath Rajeswaran in
Bengaluru; Editing by Nivedita Bhattacharjee)
