HDFC Bank, consumer stocks weigh on Indian shares; US inflation eyed

By Hritam Mukherjee and Bharath Rajeswaran

BENGALURU (Reuters) -Indian shares closed lower on Wednesday, dragged by top private lender HDFC Bank and consumer stocks, while investors buckled up for a highly awaited U.S. inflation print.

The blue-chip NSE Nifty 50 fell 0.08% to 22,200.55 points, while the S&P BSE Sensex settled 0.16% lower at 72,987.03.

Seven of the 13 major sectors declined, with financial services shedding 0.32% and snapping a three-session winning streak.

HDFC Bank – the heaviest Nifty 50 stock – lost 1.54% on the day.

“Sustained FPI (foreign portfolio investors) selling is creating nervousness in the markets and large-caps, financials like HDFC Bank, which have high FPI ownership, could remain subdued ahead of elections,” said G Chokkalingam, managing director of research at Equinomics Research.

FPIs have sold Indian shares worth 252.80 billion rupees (about $3 billion) in just 10 sessions in May, the highest since January.

Volatility in domestic equities rose on the day, hovering around 19-month high levels hit on Monday.

State-run banks added 1.42%, logging their best session in over two weeks, led by 5.02% gains in lender Canara Bank after its inclusion in a key MSCI index.

IT stocks, which earn a significant share of their revenue from the United States, were muted ahead of the U.S. consumer inflation print on Wednesday.

Hotter-than-expected inflation could lead to a further delay in U.S. rate cuts, triggering further foreign outflows, analysts said.

Consumer stocks lost 0.91%, led by a 5.23% drop in Colgate-Palmolive India, despite reporting a rise in quarterly profit.

“While Colgate’s profit beat estimates, on a low base, the results are still underwhelming,” said ICICI Securities, adding market share losses in the naturals segment is a key risk for the company.

The broader, more domestically-focussed small- and mid-caps gained 0.58% and 0.96%, outperforming the benchmarks.

($1 = 83.4690 Indian rupees)

(Reporting by Hritam Mukherjee and Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman and Sonia Cheema)


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