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Indian Shares Log Worst Week In Over Two Months As IT Stocks Slump

The Nifty 50 index closed down 0.61 per cent at 18,496.60, while the S&P BSE Sensex ended 0.62 per cent lower at 62,181.67, with both indexes posting their sharpest drops in a week

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Indian shares slid on Friday to log their worst week in over two months as IT stocks tumbled as HCL Technologies' warning of a potential slowdown in client spending in the industry's key U.S. market.

The Nifty 50 index closed down 0.61 per cent at 18,496.60, while the S&P BSE Sensex ended 0.62 per cent lower at 62,181.67, with both indexes posting their sharpest drops in a week.

The Nifty lost 1.07 per cent for the week, while the Sensex fell 1.09 per cent, logging their biggest one-week slides since the week-ended September 30.

IT stocks, the second most influential sectoral group on the Nifty, tumbled 3.14 per cent on the day and more than 6 per cent for the week. The weekly drop was the steepest since mid-September when IT stocks fell in tandem with U.S tech stocks.

The decline on the day was sparked by HCL Chief Executive C. Vijayakumar's warning that revenue growth for the current financial year would be at the lower end of its guidance due to furloughs and a drop in spending in some sectors.

"The commentary raised doubts over the pace of recovery in I.T. space," said Narendra Solanki, head of equity research (fundamental) at Anand Rathi Shares & Stock Brokers.

Analysts said investors would also remain cautious ahead of key announcements on the closely-watched U.S. consumer price inflation data and the Federal Reserve's monetary policy decision next week.

Earlier, the markets had opened higher as crude prices hovered near one-year lows and on hopes of a global demand revival due to China's easing of strict COVID-19 restrictions.

But the mood quickly soured after HCL's warning, which weighed on almost all sectors. The PSU bank index snapped a six-day rally, losing over 2.5 per cent.

Paytm was the rare bright spot, jumping 7.16 per cent after saying it would consider a share buyback proposal.


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