BENGALURU: Indian shares fell on Monday to close at their lowest in a month, weighed down by losses in information technology and banking stocks after U.S. Federal Reserve signalled aggressive rate hikes.
Fed Chair Jerome Powell’s promise of policy “pain” to contain inflation quashed hopes that the central bank would soften its rate hike stance to prevent an economic slowdown.
The NSE Nifty 50 index ended down 1.4% at 17,312.90, while the S&P BSE Sensex dropped 1.5% at 57,972.62.
The IT index slumped 3.5%, while the bank index fell 1.8%.
The Indian rupee dropped to an all-time low versus the dollar on Monday on bets the Federal Reserve will keep a restrictive stance for longer, prompting the Reserve Bank of India to step in.
Powell’s speech comes at a time foreign investors were returning to Indian stocks after dumping them in the first half, as they look for higher returns amid expectations that major central banks will slow their rate hike cycle.
Indian shares flat in volatile trade, IT weakens
“Investors had already got the wind of bearish undertone for the start of the week, after the U.S. Fed chairman’s speech on Friday talked about further rate hikes going ahead to tame inflation,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Shares of fertiliser companies fell between 2% and 5% on Monday following a government announcement mandating companies availing subsidy, to market their products under a single brand.
Meanwhile, Reliance Industries Chairman Mukesh Ambani on Monday said the telecom unit, Jio, will begin rolling out 5G services for its subscribers in the next two months.
In the company’s 45th annual general meeting, Ambani said his younger son Anant, has joined the company’s New Energy business, while his other two children - Akash and Isha - assumed leadership roles in Jio and retail.
Reliance shares closed down 0.8%.
Comments
Comments are closed for this article.