BENGALURU - Indian shares declined on Friday after an eight-session rally, as investors secured profits ahead of U.S. payrolls data that could provide more cues on a shift in the Federal Reserve's rate-hike plans.
After hitting record highs in the previous sessions, the S&P BSE Sensex fell 0.9% to 62,715.74, as of 12:13 p.m. IST, while the Nifty 50 index shed 0.87% to 18,648.9. Forty-one of the Nifty 50 stocks declined.
The Nifty rose 3.6% over the last eight sessions and is on course to gain for a second straight week.
"Investors are booking some profits after the recent run-up. At higher valuations, there is a shift happening from expensive stocks to value stocks," said Anita Gandhi, director at Arihant Capital Markets.
The Nifty MidCap 100 and Nifty SmallCap 100 were up 0.39% and 0.19%, respectively.
The Nifty Midcap is on track to record its biggest weekly gain since July.
Investors will be keenly watching the U.S. non-farm payrolls data, scheduled to be released at 7:00 pm IST (1330 GMT) and is likely to show job growth was the smallest in nearly two years in November.
Data on Thursday, showing falling U.S. job openings and contracting U.S. manufacturing activity, bolstered expectations that the central bank will slow the pace of interest rate hikes as soon as its December policy meeting.
Market participants also expect the Reserve Bank of India to follow suit and raise interest rates by a smaller 35 basis points next week, according to economists polled by Reuters.
Nifty Auto index declined nearly 1%, led by losses in Bajaj Auto, Mahindra and Eicher Motors, as analysts flagged tepidness in rural demand.
Nifty oil and gas index was the top sectoral gainer, rising 1%, after the government reduced windfall tax on domestic crude and helped boost stocks of companies such Reliance Industries and ONGC.
Shares of Paytm jumped nearly 5% after the company said it expects to become free cash flow positive in the next 12-18 months.
(Reporting by Bharath Rajeswaran and Akansha Victor in Bengaluru; Editing by Dhanya Ann Thoppil and Eileen Soreng)