Indian shares weighed down by banks, IT stocks

By 0505 GMT, the blue-chip NSE Nifty 50 index had fallen 0.4% to 17,400.10 and the benchmark S&P BSE Sensex had slipped 0.45% to 58,387.46

  
A stock broker looks at a terminal while trading at a stock brokerage firm in Mumbai November 17, 2008.

A stock broker looks at a terminal while trading at a stock brokerage firm in Mumbai November 17, 2008.

Reuters/Arko Datta

BENGALURU - Indian shares inched lower on Thursday, weighed down by banking and IT stocks, a day after the central bank left key interest rates unchanged to support economic growth.

By 0505 GMT, the blue-chip NSE Nifty 50 index had fallen 0.4% to 17,400.10 and the benchmark S&P BSE Sensex had slipped 0.45% to 58,387.46 after two straight sessions of sharp gains.

The Nifty bank index declined 0.86%, while the Nifty IT index was down 0.81%. The Nifty Auto index dropped as much as 0.6% after rising roughly 2% on Wednesday.

"Worries on the inflation front are definitely weighing on the banking stocks today, considering they could react sharply to inflation data," said Gaurav Garg, head of research at CapitalVia Global Research.

"In the short term, we could definitely see some surge in inflation, but it will not likely be an area of concern for the RBI (Reserve Bank of India)."

A Reuters poll showed retail inflation likely accelerated last month towards the upper limit of the RBI's 2%-6% target range as fruit and vegetable prices climbed. The CPI data is due on Monday. 

"Ever since the news broke on Omicron (coronavirus) variant not being as fatal as the Delta variant, the market mood has been quite positive, leading up to a good rally. However, the weekly expiry of options contracts could possibly keep markets volatile today," Garg said.

Both the Nifty and the Sensex have gained more than 1% so far this week, heading for a second consecutive weekly rise.

Shares of Railtel Corp of India Ltd jumped 4.7% on Thursday after the company got a work order worth 2.12 billion rupees ($28.10 million) from Ircon International.

Shares of Biocon Ltd were down 1.9%, following a report that the company was in talks with generic drugmaker Mylan for a merger of their biosimilar businesses. 

($1 = 75.4500 Indian rupees)

(Reporting by Shivani Singh in Bengaluru; Editing by Subhranshu Sahu) ((ShivaniSingh1@thomsonreuters.com; +91 89 6969 2349))


More From Equities