Indian shares fall for second session as cement makers slump

·2-min read
FILE PHOTO: A man walks out of the Bombay Stock Exchange (BSE) building in Mumbai

By Chandini Monnappa

BENGALURU (Reuters) -Indian shares ticked lower on Monday as a slump in cement makers offset gains in metal stocks at the start of a week where the central bank is expected to deliver another interest rate hike.

The NSE Nifty 50 index closed 0.09% lower at 16,569.55 and the S&P BSE Sensex slipped 0.17% to 55,675.32, both falling for a second straight session.

The market has seen volatile moves in the past week as worries build over stubbornly high inflation, with the Reserve Bank of India expected to follow up its unscheduled rate hike in May with another move at the policy meeting on Wednesday.

"There is nervousness in the market ahead of rate decision amid pain of high inflation," said Saurabh Jain, assistant vice president at SMC Securities.

"We are also seeing supersonic volatility and it is difficult for market participants to make up their mind with so many variables moving in both directions."

At the close on Monday, cement makers were among the top drags. Shree Cement fell 3.4% to its lowest level in more than one and a half years, while sector leader UltraTech Cement dropped 1.8% to a 16-month low.

Shares of cement companies come under pressure as competition in the sector heats up. Last week, UltraTech Cement announced it would spend $1.66 billion to boost capacity to stave off competition from the sector's newest entrant Adani Group.

Beaten-down technology stocks settled 0.2% lower after falling more than 2% earlier in the session.

Spicejet fell 2.7% to a 20-month low after it said the country's aviation regulator had imposed a penalty on the budget carrier.

Limiting the losses, metal stocks on the Nifty index rallied 1.12%. The gains were supported by a jump in iron ore futures to a 10-month high on hopes of improving demand.[IRONORE/]

Auto stocks closed 0.2% higher, boosted by a 4.2% rise in Bajaj Auto.

($1 = 77.4300 Indian rupees)

(Reporting by Chandini Monnappa in Bengaluru; Editing by Shailesh Kuber and Aditya Soni)

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