Indian equities set to drop weekly; tech stocks top the list for the day

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BENGALURU, June 10 (Reuters) – Indian stocks fell 1% on Friday and kept benchmarks on track for their first weekly decline in four as investors around the world worried about the impact of an aggressive tightening of monetary policy on economic growth.

The NSE Nifty 50 index (.NSEI) fell 1.09% to 16,298.25 at 05:05 GMT and the S&P BSE Sensex (.BSESN) fell 1.16% to 54,676.97, hammered by the losses of technology stocks and metals.

Fears that aggressively tightening monetary policies to fight stubborn inflation could stifle economic growth weighed on global investor sentiment this week.

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Asian stocks fell on Friday with MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) down 1.2% as the European Central Bank’s rate hike forecasts and forecasts upcoming US inflation data has investors baffled.

On Wednesday, in a widely expected move, the Reserve Bank of India hiked the repo rate by 50 basis points just a month after unveiling an unanticipated 40 basis point hike, signaling further tightening ahead to combat the surge in inflation. Read more

“Global stock markets are seeing negative moves after the ECB meeting. Until the next US Fed outcome, Indian markets may remain directionless,” said Narendra Solanki, Head of Equity Research (Fundamental) at Anand Rathi Investment Services.

“Comments on inflation and the upcoming Fed meeting will be key data points that will help markets decide on next moves.”

Tech stocks (.NIFTYIT) led the decline in broad-based selling, falling 2.5% to a two-week low. Metals stocks (.NIFTYMET) slid 2.4%, also hitting a two-week low.

Life Insurance Corp of India (LIFI.NS) extended its losses to a ninth session and slipped 1.6% to a record high.

Among the few gainers, IIFL Finance (IIFL.NS) jumped 8.9% to its highest level in more than five weeks after the IIFL Home Finance unit said a unit of Abu Dhabi Investment Authority would invest 22 billion rupees ($282.74 million) for a 20% stake.

($1 = 77.8100 Indian rupees)

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Reporting by Chandini Monnappa in Bangalore; Editing by Subhranshu Sahu

Our standards: The Thomson Reuters Trust Principles.

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