Friday, October 7

Indian shares drop over 2% on inflation worries, IT leads losses

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BENGALURU — Indian shares fell more than 2% on Thursday, hammered by losses in technology and metal stocks, with investors globally dumping riskier assets as soaring inflation stokes fears of an economic slowdown.

The NSE Nifty 50 index ended down 2.65% at 15,809.40, while the S&P BSE Sensex dropped 2.61% to 52,792.23.

The benchmark indexes that were up more than 2% for the week as of Wednesday, erased most of those gains in their second straight session of declines. They have fallen nearly 7% so far this month.

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Asian and European shares also tumbled after a brutal selloff on Wednesday on Wall Street that saw the S&P 500 falling the most since June 2020.

“The domestic market has resumed a downtrend taking cues from our global counterparts, US markets specifically,” said Ajit Mishra, vice president, research at Religare Broking.

All major nifty sub-indexes fell, with the Nifty IT index leading losses, down 5.74%. Earlier in the session, the sub-index dropped to its lowest since June last year.

JP Morgan analysts said on Thursday surging inflation, supply-chain issues and the hit from the Ukraine war will bring an end to the growth boom that India’s IT services industry enjoyed during the pandemic.

IT stocks were the top five percentage losers on the Nifty, with Infosys, Wipro, HCL Technologies , Tech Mahindra and Tata Consultancy Services plunging between 5% and 6%.

Nifty’s metal index dropped 4.1% led by a 5.2% drop in Steel Authority of India.

ITC rose 3.3% and was one of the three gainers on the Nifty, after the cigarettes-to-hotel conglomerate late on Wednesday reported a jump in March-quarter profit.

JK Lakshmi Cement settled 7.3% higher. The company late on Wednesday reported a 15.5% rise in consolidated net profit for the March quarter.

(Reporting by Rama Venkat in Bengaluru; Editing by Sherry Jacob-Phillips, Aditya Soni and Vinay Dwivedi)