By Bharath Rajeswaran
(Reuters) -Indian shares fell more than 1% on Friday, dragged down by a slide in metal stocks and, more broadly, worries that a rise in urban and rural inflation would hurt corporate earnings.
The NSE Nifty 50 had slid 1.21% to 24,251 points as of 11:11 a.m. IST, with 40 of the 50 stocks lower. The 30-member BSE Sensex shed 1.21% to 80,315.55.
HDFC Bank and Reliance, the two heaviest-weighted stocks in both indexes lost 1.2% and 1.8%, respectively.
The smallcap and midcap indexes lost about 1.5% each, while all 13 major sectors declined.
Metals slid 2.3% due to a stronger U.S. dollar and a lack of policy details about stimulus measures from top consumer China. [MET/L]
Tata Steel, Hindalco, JSW Steel were among the top five Nifty losers.
The FMCG index lost 1% after data showed that while overall domestic inflation eased in November, the rural and urban food inflation components rose — to 9.1% from 6.68% and to 8.74% from 5.62%, respectively.
That added to worries about earnings and economic growth, especially after lacklustre updates from auto and consumer companies lately, said Anita Gandhi, founder and head of institutional broking at Arihant Capital Markets.
“It may seem a bit perplexing to see profit taking after largely positive inflation data from the U.S. and easing headline inflation in India, but the devil is in the detail.”
IT stocks fell 1.2% after gaining 2.2% in the last four sessions, while financials lost 1.4%. They are the highest-weighted among the 13 sectors.
This was likely due to a continuation of foreign investors selling, said Sunny Agrawal, head of fundamental equity research at SBICaps Securities.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman, Sonia Cheema and Savio D’Souza)
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