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Indian shares drop for second day as IT, pharma stocks drag

Indian shares settled lower on Wednesday, dragged by pharma and technology stocks, while data showed that the country’s economic growth slowed to the lowest in a year during the March quarter.

After see-sawing between gains and losses for most of the session, the NSE Nifty 50 index (.NSEI) ended 0.37% lower at 16,522.75 and the S&P BSE Sensex (.BSESN) finished down 0.33% at 55,381.17.

In the previous session, both indexes snapped three straight sessions of gains as a rally in technology stocks paused and banking stocks fell.

“We are moving into a consolidation phase, investors might not be all that keen to push decisions or put money on the table ahead of India central bank’s monetary policy decision next week,” said Anand James, chief market strategist at Geojit Financial Services.

Most major Nifty sub-indexes settled lower, with the IT (.NIFTYIT) and pharma indexes (.NIPHARM) leading declines to end down 1.4% and 1.3%, respectively.

Bajaj Auto (BAJA.NS) dropped 3.7% and was the top percentage loser on the Nifty 50 index. Early on Wednesday, the automaker posted a 1% rise in May sales from a year ago.

This pushed the Nifty auto (.NIFTYAUTO) sub-index to snap a four-day rally and close down 0.2%.

However, slight gains in financial stocks limited losses.

The Nifty finance index (.NIFTYFIN), bank index (.NSEBANK) and PSU bank index (.NIFTYPSU), which tracks state-run banks, closed up between 0.16% and 0.7%.

On Tuesday, government data showed India’s gross domestic product grew 4.1% year-on-year in January-March, slowed by weakening consumer demand amid soaring prices.

India’s factory activity, meanwhile, expanded at a better-than-expected pace last month, data on Wednesday showed.

The MSCI world equity index (.MIWD00000PUS), which tracks shares in 50 countries, was flat as investors fretted over soaring inflation and the hit on global growth from looming interest rate rises.

Source By: Reuters