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Tuesday, December 6, 2022
Stocks & Shares

Indian shares drop on Covid concerns, hawkish Fed

shares drop

The blue-chip NSE Nifty 50 index shed 1.38 per cent to 17,677.75 and the benchmark S&P BSE Sensex dropped nearly 1.5 per cent to 59,341.06

Indian shares dropped more than 1 per cent on Thursday, weighed down by losses in financial and technology stocks, as an alarming spike in daily Covid-19 cases and a hawkish stance by the U.S. Federal Reserve spooked investors.

The blue-chip NSE Nifty 50 index shed 1.38 per cent to 17,677.75 by 0520 GMT and the benchmark S&P BSE Sensex dropped nearly 1.5 per cent to 59,341.06 after a four-session winning streak. Despite the session’s losses, both indexes were up about 2 per cent for the week.

Indian shares also tracked weakness in global markets after minutes of the U.S. Federal Reserve’s December policy meeting pointed to quicker interest rate hikes to tame persistently high inflation.

India’s daily Covid-19 cases climbed 57 per cent in a day to 90,928, raising fears of more restrictions and concerns about its impact on the economic recovery.

In Mumbai, all major Nifty sub-indexes were trading in negative territory, with the banking sector down 1.3 per cent after five straight sessions of gains.

Indian markets are likely to consolidate till the budget is announced. The first two quarters of the financial year saw brilliant earnings growth despite margin contractions and the same is expected this quarter as well, said Amit Gupta, a fund manager at ICICI Securities.

The Nifty IT index, which was among the top performing sectors last year, extended losses to a second day and was down 1.48 per cent.

Analysts said while stellar-performing IT stocks could see profit-booking in the near-term, they will continue to do well on prospects of decent revenue growth.

Shares of oils-to-telecom heavyweight Reliance Industries fell 2 per cent and were among the top drags to the benchmark indexes.

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