By Bharath Rajeswaran and Indranil Sarkar
(Reuters) – India’s benchmark indexes fell on Wednesday due to worries over corporate profit growth as the earnings season nears and as the likelihood of fewer U.S. rate cuts weighed on the market overall, and IT stocks in particular.
The Nifty 50 fell 0.57% to 23,574.35 points as of 10:55 a.m. IST, while the BSE Sensex was down 0.61% to 77,729.44.
Recent quarterly updates from companies including Dabur India and Hero MotoCorp did not give the market hope that corporate profit growth in the December quarter would be any better than the previous quarter, which was the worst in four years.
“The business updates from Indian companies have heightened worries of earnings moderation, which is weighing on sentiment and triggering a drop in domestic equities ahead of the results season,” said Kranthi Bathini, director of equity strategy at Wealthmills Securities.
Global pressures such as a stronger dollar and rising U.S. bond yields also persist. Moreover, recent U.S. data showed a stable economy and labour market, raising the odds of fewer rate cuts this year, which would make the U.S. more attractive to investors in comparison to emerging markets, including India.
The likelihood of fewer rate cuts also hurt IT firms, which earn a major share of their revenue from the U.S. The index was down 1.4%, with TCS, which will kick off the earnings season on Thursday, flat.
Twelve of the 13 major sectors declined. The smallcaps and midcaps lost about 1.3% each.
On the bright side, Reliance Industries, the second-heaviest stock on the Nifty, rose 2%, after Jefferies reiterated its “buy” rating, saying the stock’s valuation was the lowest since COVID-19.
Sobha fell 3.4% after reporting a drop in total home sales in the December quarter.
Ola Electric lost 4.7% after the markets regulator warned the EV maker’s CEO for violating disclosure norms.
(Reporting by Bharath Rajeswaran and Indranil Sarkar in Bengaluru; Editing by Sonia Cheema and Savio D’Souza)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibility for its content.