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Indian shares drop as tech rally fades; all eyes on GDP data

Indian shares fell on Tuesday ahead of key economic growth data, while a rally in technology stocks lost steam and Sun Pharmaceutical Industries dropped after the company posted a loss for the March quarter.

The NSE Nifty 50 index (.NSEI) was down 0.58% at 16,563.20, as of 0427 GMT, while the S&P BSE Sensex (.BSESN) fell 0.73% to 55,517.99.

Over the last three sessions, both indexes rose helped by a rally in beaten-down technology stocks. On Monday, the benchmark indexes added nearly 2%, as auto stocks also joined a broader rally after upbeat March-quarter results from Mahindra and Mahindra (MAHM.NS).

On Tuesday, Asian stocks also lost ground after hot inflation reading in Germany renewed fears about the pace and scale of looming interest rate hikes.

A rise in Brent crude futures after the European Union agreed to slash oil imports from Russia by the end of 2022 also weighed on sentiment.

In domestic trading, Nifty’s IT sub-index (.NIFTYIT) snapped a three-day rally and dropped 1.5%.

Shares of Sun Pharma (SUN.NS) tumbled 4.2% and were the top losers in the Nifty 50 index after the drugmaker reported a consolidated net loss after tax of 22.77 billion rupees ($293.27 million) for the March quarter.

Life Insurance Corporation of India (LIFI.NS), the country’s biggest insurer and largest domestic financial investor, dropped 2.9% after reporting a lower March quarter profit in its first results since a lackluster market debut earlier this month. 

However, auto stocks (.NIFTYAUTO) extended Monday’s gains, rising 1.2% to a three-month high. Shares of Mahindra and Mahindra rose 3.1% to a record peak for a second straight session and was the top percentage gainer on the Nifty 50 index.

The focus was on GDP data expected later in the day. India’s economic recovery from the COVID-19 pandemic likely stumbled again in the first quarter of this year, a Reuters poll last week showed. 

Source By; Reuters