Indian shares drop amid concerns of a rate increase
Indian markets ended the day lower on Thursday as disappointing earnings from Wipro pressured IT sectors and the nation’s retail inflation data fueled worries about further rate hikes.
The S&P BSE Sensex slid 0.68% to 57,235.33 and the NSE Nifty 50 index dropped 0.64% to settle at 17,014.35.
“I don’t expect a rally or a fall,” said Neeraj Dewan, director at Quantum Securities. “When going down, it will get some support from banks and infrastructure businesses, and rising up will be a challenge as recession fears will keep a lid on export-oriented stocks like IT.”
Food price increases caused India’s retail inflation to soar to a five-month high in September; this increased fear of future interest rate hikes as retail inflation remained above the Reserve Bank of India’s objective for three consecutive quarters.
Even globally, equities fell on Thursday as investors awaited critical U.S. inflation data later in the day for hints on the extent of the Federal Reserve’s rate hikes.
Greater competitor Infosys Ltd. finished 0.6% lower. Following the bell, the corporation announced a better prediction for full-year revenue growth and an improved quarterly profit.
After reporting a 51% increase in quarterly profit, brokerage firm Aditya Birla Money Ltd. finished 11.9% higher.
The metal and pharmaceutical indexes of the Nifty rose by 0.11% and 0.22%, respectively, assisting in containing losses. (Editing by Dhanya Ann Thoppil, Neha Arora, Saumyadeb Chakrabarty, and Savio D’Souza; reporting by Rama Venkat in Bengaluru)
