Indian shares see worst day in two weeks as IT, banks slip

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A man wearing a protective mask walks past the Bombay Stock Exchange (BSE) building in Mumbai

BENGALURU (Reuters) -Indian shares ended lower on Thursday, dragged by technology and bank stocks that slipped from record highs, as fears of a large interest rate hike by the U.S. Federal Reserve gripped markets.

The NSE Nifty 50 index closed 0.7% lower at 17,877.4, and the S&P BSE Sensex slipped 0.68% to 59,934.01, both registering their worst session in two weeks.

Broader markets have been on edge, as investors assess the possibility of the U.S. Federal Reserve going for a 100-basis-point interest rate hike next week to tackle higher inflation. [MKTS/GLOB]

Meanwhile, Fitch cut India's economic growth forecast for 2022/23 to 7% from 7.8%, in the backdrop of a slowdown amid global economic stress, elevated inflation and tighter monetary policy.

The Nifty IT index slumped 1.4% after dropping 3.4% in the previous session, with tech major Infosys sliding 2.9%. Infosys has lost more than 7% over the last two sessions, hit in part, by a downgrade by Goldman Sachs to 'sell'.

The Nifty Bank index slipped 0.47% after hitting a record high earlier in the session.

Meanwhile, auto and tyre makers were a bright spot in the tepid market, with carmaker Maruti Suzuki India climbing 2.7% to its highest in over four years following reports that BofA Securities raised its target price on the stock.

Tyre major MRF surged 9.1% to its highest since Feb. 2021 while CEAT soared 20%.

The Nifty Auto index jumped 0.7% to a record closing high.

(Reporting by Chris Thomas in Bengaluru; Editing by Neha Arora)