By Rama Venkat
BENGALURU (Reuters) -Indian shares dropped nearly 2% on Friday and were set for their worst week since November, as investors fretted that fast-paced interest rate hikes to tame surging inflation would slow global economic growth.
The NSE Nifty 50 index was down 1.82% at 16,378.55, as of 0503 GMT, with all sectors trading in negative territory. The S&P BSE Sensex fell 1.78% to 54,709.18.
The benchmark indexes were on track for a fourth straight weekly drop, shedding more than 6%, weighed down by a surprise interest rate hike by the Reserve Bank of India, foreign fund outflows and mixed corporate earnings results.
So far this week, foreign investors have net sold Indian equities worth $635 million, compared with $881 million offloaded in the same period last week, according to Refinitiv data.
“Domestic markets are lower on the global headlines, which are focusing more on high inflation as well as the Fed rate increase two days back,” said Prashanth Tapse, vice president of research at Mehta Equities.
The Fed on Wednesday raised interest rates by half a percentage point as expected and Chair Jerome Powell explicitly ruled out a 75 basis point hike in the next policy meeting.
On the Nifty index, metal, IT, bank, auto and finance were among the top losers, declining between 2% and 3%.
Among individual stocks, Reliance Industries, India’s most valuable company, was down 0.8%. The oil-to-retail conglomerate is expected to report its quarterly results later in the day.
Cigarettes-to-hotel conglomerate ITC Ltd was the top percentage gainer on the Nifty 50, climbing more than 1%.
Asian stocks fell over concerns that U.S. Federal Reserve and some other major central banks will have to raise interest rates even more aggressively to combat red-hot inflation. [MKTS/GLOB]
(Reporting by Rama Venkat in Bengaluru and additional reporting by Gaurav Dogra; Editing by Vinay Dwivedi and Subhranshu Sahu)
