BENGALURU (Reuters) -Indian shares fell on Friday, tracking a slide in global equities on fears of a looming U.S. recession, and as sentiment soured after index provider MSCI said it will cut the weightings of four Adani Group companies.
The Nifty 50 index was down 0.29% at 17,841.85 as of 10:42 a.m. IST, while the S&P BSE Sensex fell 0.26% to 60,651.59.
Six of the 13 major sectoral indexes declined, with information technology and metal falling over 0.5% and 1.2%, respectively, amid rising growth concerns in the U.S.
Wall Street equities closed lower following comments from Federal Reserve officials that a recession is looming in the world’s largest economy.
Asian markets fell, with the MSCI’s broadest index of Asia-Pacific shares outside Japan sliding 1.23%. [MKTS/GLOB]
The comments from Fed officials over the last two days indicate that the high rate regime could likely last till the end of 2023 or even early 2024, said Narendra Solanki, head of equity research at Anand Rathi Shares & Stock Brokers.
However, Indian equities have a limited downside due to significant correction and markets will likely witness sideways movement in the next few weeks in the absence of any major triggers, two analysts said.
Adding to the concerns in domestic equities was the uncertainty over the Adani conglomerate’s future trajectory, after financial index provider MSCI said it will cut the weightings of four group companies. Analysts have warned the move could lead to outflows and a further slide in value.
Most Adani group stocks extended their decline in Friday’s session. “MSCI ETF has a significant fund size. If the MSCI cuts weightings on Adani group companies, it would have a bearing on the flows into the respective stocks,” Solanki added.
Among other stocks, Bajaj Finance gained 1% after Jefferies hiked its investment in the company in its key portfolios.
($1 = 82.5250 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman and Nivedita Bhattacharjee)
