Indian shares fall as tech, autos weigh; set for weekly losses

A man looks at a screen displaying budget news, on a facade of the Bombay Stock Exchange (BSE) building in Mumbai, India, February 1, 2022. REUTERS/Francis Mascarenhas

BENGALURU, Sept 16 (Reuters) – Indian shares dropped more than 1% on Friday, with the benchmark indices erasing their gains for the week dragged down by technology and automobile stocks following a broader global selloff over recession worries.

The NSE Nifty 50 index (.NSEI) was down 1.03% at 17,693.45, as of 0456 GMT and the S&P BSE Sensex (.BSESN) declined 1.03% to 59,316.90. Both the indexes looked set to post a weekly loss, after adding 1.68% each last week.

“The market has started showing some indications of fatigue. Globally, the major concern now is that the Fed (Federal Reserve) might oversteer the economy and end up raising rates too much too fast, pushing the US economy into a sharp recession,” VK Vijayakumar, chief investment strategist at Geojit Financial Services, said in a note.

“In this challenging environment, it would be difficult for India to sustain the decoupling from the global trend which has been a recent pattern in India,” Vijayakumar added.

Meanwhile, foreign investors sold a net $173 million worth of Indian equities on Thursday, snapping a seven-day long buying streak, Refinitiv data showed.

The Nifty IT index (.NIFTYIT) was the worst performer among sectors, dropping as much as 2.2% in its fourth straight session of losses, while the Nifty automobile index (.NIFTYAUTO) declined 1.9%.

Auto makers Mahindra and Mahindra Ltd (MAHM.NS), Tata Motors Ltd (TAMO.NS) and IT services major Tata Consultancy Services Ltd (TCS.NS) were among the top drags to the Nifty 50, falling more than 2% each.

Broader Asian equities also fell, following overnight Wall Street losses on fears of aggressive tightening by the Fed in the face of warnings of a global recession from the World Bank and the International Monetary Fund.

Rating agency Fitch earlier this week cut India’s gross domestic product growth forecast for the current fiscal year to 7% from 7.8%, amid a slowdown triggered by global economic stress, elevated inflation and tighter monetary policy. read more

Reporting by Rama Venkat in Bengaluru, additional reporting by Gaurav Dogra; Editing by Dhanya Ann Thoppil and Rashmi Aich

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