Rate fears weigh on Indian shares; IT, metals lead losses

A man speaks on his mobile phone past a newly launched Nifty Indices logo inside the National Stock Exchange building in Mumbai

By Bharath Rajeswaran and Nishit Navin

BENGALURU (Reuters) -Indian shares fell on Monday, led by declines in IT and metal stocks, as robust U.S. economic data reinforced fears of aggressive rate hikes.

The Nifty 50 index settled 0.42% lower at 17,392.70, while the S&P BSE Sensex fell 0.30% to 59,288.35.

The 50-share NSE index fell below the 200-day moving average of 17,376.38 during the session, for the first time since early October.

The benchmark Nifty 50 declined for the seventh straight session, its longest losing streak in nearly five months.

Eight of the 13 sectoral indexes declined, led by a 2.39% fall in metal stocks and 1.95% drop in high-weightage information technology with all of its 10 constituents in the red.

Mphasis fell over 7% and was the top loser in the IT index after global brokerage firm Citi said it expects the company to see muted growth in the March quarter due to a weak macro environment.

The drop in the IT sector, which earns a significant share of its revenue from the United States, follows data showing the U.S. personal consumption expenditures price index, the Federal Reserve's preferred inflation measure, accelerated in January.

"High inflation is a poison for markets," said independent market expert Mehraboon Irani.

"Expect stock prices and valuations across sectors to come down," Irani said, adding "it's time for investors to preserve some cash as the time to go shopping is still some time away."

Fed futures now have rates peaking around 5.42%, suggesting at least three more hikes from the current 4.50-4.75% band.

Among individual stocks, Bajaj Auto fell 5.46% after a report said that the company could take a steep cut in production due to uncertainties in its top market, Nigeria.

Most Adani group stocks extended fall, with Adani Enterprises losing over 9%. The stock was the top Nifty 50 loser.

($1 = 82.9200 Indian rupees)

(Reporting by Bharath Rajeswaran and Nishit Navin in Bengaluru; Editing by Eileen Soreng and Dhanya Ann Thoppil)