By Bharath Rajeswaran
BENGALURU (Reuters) -Indian shares slid on Friday after rising to new record highs in the first hour of the trading session, tracking a fall in Asian peers on concerns of further monetary policy tightening by the U.S.
Federal Reserve.
The Nifty 50 index was down 0.65% at 19,369.80, while the S&P BSE Sensex fell 0.64% to 65,361.67, as of 12:02 p.m. IST.
Both indexes rose more than 0.1% in the first hour of the session to hit record highs, before broad sectoral selling emerged.
Twelve of the 13 major sectoral indexes logged losses, with the high-weightage financials and IT losing over 0.8% each.
Asian equities declined after data showed a rise in the U.S.
private payrolls, stoking fresh fears of a prolonged high-interest regime and triggering a spike in bond yields across the world. Wall Street equities closed lower overnight. [MKTS/GLOB]
India’s valuations may soon overextend after the recent rally, according to analysts at CLSA.
The Nifty has risen nearly 12% in fiscal 2024 so far.
The global brokerage, in a note on Thursday, also added that investor sentiment – measured by the bull-bear index – has swung from an extremely bearish reading of 8.2% in March 2023 to an extremely bullish reading at 95.9% in early July.
While noting that the outlook for domestic markets remained positive, two analysts cautioned that rate hike fears in the U.S., escalating U.S.-China trade tensions, and concerns over China’s economic recovery could trigger risk-off sentiment in the next few sessions.
Among individual stocks, Mahindra & Mahindra Financial Services lost over 3% after BofA Securities downgraded to “neutral” from “buy”, citing high valuations and elevated operating costs.
On the other hand, Titan Company rose over 3% to hit a record high after it said in an update that it recorded a 20% year-on-year revenue growth in the June quarter.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Varun H K, Nivedita Bhattacharjee, and Janane Venkatraman)
