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INDIA STOCKS-Indian shares slip ahead of third-quarter earnings on rate worries

Reuters · 01/06/2023 00:06
INDIA STOCKS-Indian shares slip ahead of third-quarter earnings on rate worries

Updates levels, adds analysts' comments

- Indian shares edged lower on Friday, after strong U.S. data indicated the Federal Reserve would have to keep hiking interest rates.

The Nifty 50 index .NSEI was down 0.26% at 17,944.95 as of 10:30 a.m. IST, while the S&P BSE Sensex .BSESN fell 0.30% to 60,164.87. Both the indexes had risen 0.3% during the session.

Most of the major sectoral indexes logged losses. Twenty-five of the Nifty 50 constituents fell, with information technology stocks .NIFTYIT declining ahead of the third quarter earnings season, set to begin on Monday.

"The in the markets over the last few sessions is due to muted earnings expectations, like the kind we saw with Bajaj Finance and FMCG companies," said Aishvarya Dadheech, director and fund manager at Ambit Asset Management.

"Fund flows, including from domestic mutual funds have been very encouraging, over the last few months," he added.

Wall Street equities closed lower overnight after data showed private employers hired more workers than expected in December, suggesting strength in the labour market. The resilience could allow the Fed to boost its target interest rate above the 5.1% peak projected earlier.

Asian markets shrugged off rate worries on Friday, with the MSCI Asia ex Japan .MIAPJ0000PUS rising 0.74%. MKTS/GLOB

Global macro data and commentary on the Fed's rate hike trajectory would add to market volatility in the term, said analysts.

Adding to losses in Indian equities was the rebound in oil prices, which rose over 1% on lower fuel inventories in the U.S.O/R

Higher oil prices are a for oil-importing countries like India, where crude constitutes the bulk of the country's import bill.

Among individual stocks, index heavyweight Reliance Industries RELI.NS rose over 1%, capping losses in the markets. Sobha SOBH.NS rose over 2% after the real estate firm posted its best-ever sales in the third quarter, according to its business update.

($1 = 82.5680 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman)