Weak earnings, fading US rate cut hopes drag Indian shares

FE Team | Published: January 18, 2024 23:15:54

BENGALURU, Jan 18 (Reuters): Indian shares fell on Thursday, as HDFC Bank extended post-earnings decline, while IT stocks came under pressure amid growing doubts over early US rate cuts.
The blue-chip NSE Nifty 50, opens new tab shed 0.51 per cent to 21,462.25, while the S&P BSE Sensex, opens new tab lost 0.44 per cent to 71,186.86.
Both indexes have fallen about 3 per cent each from the record high levels reached on Tuesday.
"We expect benchmarks to consolidate after the sharp sell-off on Wednesday (after HDFC Bank's results)," said Siddharth Khemka, head of retail research at Motilal Oswal Financial Services.
Financial services, opens new tab dropped 1 per cent, as HDFC Bank, opens new tab lost 3.34 per cent, extending losses from the worst session in over three years on Wednesday.
Banks would face immediate short-term pressure due to potential slowdown in earnings growth, and the anticipated easing of the rate cycle later in the year, said Seshadri Sen, head of research and strategist at Emkay Global Financial Services.
IT index, opens new tab fell 0.62 per cent, with LTIMindtree, opens new tab dropping 10.72 per cent after it reported a weaker-than-expected December-quarter profit and signalled a weak demand outlook.
Strong December US retail sales data dampened early rate cut expectations, opens new tab, heightening pressure on IT companies that rely on the US for a significant share of their revenue.
Among individual stocks, ICICI Prudential Life Insurance, opens new tab tumbled 5.58 per cent following a slide in new business margins in the December quarter.
State-owned NHPC, opens new tab fell 2.6 per cent after the government began the sale of up to a 3.5 per cent stake in the power generator through an offer for sale, with the floor price set at 66 rupees, representing a nearly 10 per cent discount to Wednesday's closing price.
Drug maker Sun Pharma, opens new tab climbed 2.83 per cent, emerging as the top gainer on the Nifty 50, after announcing its intent to buy the remaining stake in the Israeli unit of Taro Pharmaceutical Industries, opens new tab for $347.8 million.