Indian shares slip as IT gloom offsets gains from autos


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BENGALURU — Indian shares retreated from a five-month peak on Thursday, as banks slipped from record highs and technology stocks extended a decline, outweighing sharp advances in automakers.

The NSE Nifty 50 index was down 0.36% at 17,938.35, as of 0513 GMT, while the S&P BSE Sensex slipped 0.32% to 60,153.9.

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Markets were on edge, as investors assessed the possibility of the U.S. Federal Reserve going for a 100-basis-point interest rate hike next week to tackle elevated inflation.

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Meanwhile, Fitch cut India’s economic growth forecast for 2022/23 to 7% from 7.8%, in the backdrop of a slowdown amid global economic stress, elevated inflation and tighter monetary policy.

“About one-thirds of respondents believe that the Fed will go for a 100 bps hike, and that is continuing to have a rub-off effect on IT stocks along with the rating downgrades,” said Aishvarya Dadheech, a fund manager at Ambit Asset Management.

The Nifty IT index slumped 1.4% after dropping 3.7% in the previous session, with tech major Infosys sliding 2.4%. Infosys has lost nearly 7% over the last two sessions, hit in part, by a downgrade from Goldman Sachs to ‘sell’.

The Nifty Bank index slipped 0.21% after hitting a record high earlier in the session.

Meanwhile, automakers’ stocks were a bright spot in the tepid market, with carmaker Maruti Suzuki India climbing 4% to its highest in over 4 years.

The Nifty Auto index jumped 1.5% to a record high.

“We may remain on the sidelines until the Fed meeting,” Dadheech said, adding that new peaks for local markets could not be ruled out during the upcoming festive season, given strong foreign equity inflows, and moderation in commodity prices. (Reporting by Chris Thomas in Bengaluru; Editing by Neha Arora)


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