Indian shares fell on Thursday, weighed by a retreat in all sectors, barring information technology, on caution ahead of inflation data.
The NSE Nifty 50 fell 0.38% to 24,548.7, while the BSE Sensex shed 0.29% to 81,289.96.
“There is not much to read into the drop today. There was typical caution and broad-based profit booking ahead of a key data print,” said Aishvarya Dadheech, chief investment officer of Fident Asset Management.
India’s inflation and industrial output data after the bell will be crucial for market sentiment given the worries over slowing economic growth and the effect of rising prices on consumer consumption, analysts said.
Inflation likely eased in November, according to a Reuters poll. Moderating prices may allow the Reserve Bank of India (RBI) to cut rates in February after it held rates last week.
Indian shares end flat ahead of US, domestic inflation data
The smallcaps and midcaps snapped their 14-session winning streak and dropped 1% and 0.5%, respectively. Smallcaps hit a record high on Wednesday and exited correction territory.
“Some profit booking was due in broader markets after the sustained rise. The fact that smallcaps recouped correction losses and midcaps have almost recovered is a positive sign, but inflation data later today will guide the markets in the near term,” Dadheech said.
Eleven of the 13 major sectors logged losses.
The consumer, state-owned firms, auto and oil and gas indexes dropped about 1% each.
The lone bright spot was the 0.8% rise IT companies, which earn a significant share of their revenue from the U.S., after in-line U.S. inflation data all but guaranteed a Federal Reserve rate cut next week.
Among individual stocks, newly listed Bajaj Housing Finance dropped 6.1% after the first lock-in period for anchor investors ended on Wednesday, releasing 50% of locked-in shares.
Insurers such as SBI Life, HDFC Life and Max Financial lost 1.2%-1.6% after a media report said the industry regulator could curb their dependence on parent banks.
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