Indian shares close down ahead of U.S. jobs data

FILE PHOTO: Bombay Stock Exchange (BSE) in Mumbai

By Sethuraman N R

BENGALURU (Reuters) - Indian shares ended a tad lower on Friday, weighed by consumer and technology stocks, ahead of a major U.S. jobs report that will likely feed into the Federal Reserve's rate hike strategy.

The NSE Nifty 50 index closed down 0.1% at 17,314.65, while the S&P BSE Sensex ended mostly flat at 58,191.29. The rupee sank to a new low against the dollar.

The Nifty and Sensex recorded first weekly gain in four, rising over 1%, each.

The World Bank trimmed India's growth forecast for this financial year by a full percentage point, as rising commodity prices and debt-trouble hit economies in South Asia.

Meanwhile, the monthly U.S. jobs report on Friday will give a fresh indication of inflation pressures in the country.

"Investors have been looking to pick up bargains. But, as prices move higher there is a visible disinclination to chase. One of the major reasons being the talks around aggressive Fed rate hike decision," said Anand James, chief market strategist at Geojit Financial.

"Nonfarm payrolls data due later brings a very important perspective to Fed's plans. That's also keeping the risk appetite in check," said James.

U.S. Federal Reserve officials have showed no intention of backing down from the most aggressive rate hike campaign in decades, emphasising that the inflation fight was ongoing.

"We are also seeing other inflation trends. Commodities, which have been falling for the last few months, are likely seeing a temporary bottom. There are some signs of firmness in metals as well as oil due to supply side tightness," James said.

Crude oil prices held near their three-week high on Friday, weighing on the sentiment, as India is one of the largest importers of the commodity and high prices have a direct impact on inflation. [O/R]

The Nifty fast moving consumer goods index lost 0.6%, while the IT index dropped 0.7%.

Shares of Titan Co rose 5.3% to top the Nifty 50 after the jewellery maker said overall second quarter sales rose 18% year-on-year.

Tata Consumer dropped 1.7% and was the top Nifty 50 loser.

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Savio D'Souza, Dhanya Ann Thoppil and Saumyadeb Chakrabarty)