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Sensex Slips As IT Gloom Offsets Gains From Autos

The NSE Nifty 50 index was down 0.36 per cent at 17,938.35, while the S&P BSE Sensex slipped 0.32 per cent to 60,153.9

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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 per cent at 17,938.35, as of 0513 GMT, while the S&P BSE Sensex slipped 0.32 per cent to 60,153.9.

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.

Meanwhile, Fitch cut India's economic growth forecast for 2022/23 to 7 per cent from 7.8 per cent, 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 per cent after dropping 3.7 per cent in the previous session, with tech major Infosys sliding 2.4 per cent. Infosys has lost nearly 7 per cent over the last two sessions, hit in part, by a downgrade from Goldman Sachs to 'sell'. read more

The Nifty Bank index slipped 0.21 per cent 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 per cent to its highest in over 4 years.

The Nifty Auto index jumped 1.5 per cent 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.

(Reuters)


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