Wednesday, August 10, 2022

Indian shares decline over 1% on GDP miss, Ukraine tensions

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BENGALURU — Indian shares snapped a feeble two-day winning streak on Wednesday after data showed the country’s economic growth missed estimates, while runaway oil prices owing to the Ukraine crisis loomed large over the world’s third-largest importer of crude.

The blue-chip NSE Nifty 50 index was down 1.12% at 16,605.95 at close, and the S&P BSE Sensex fell 1.38% to 55,468.90, with both the indexes returning to negative territory after advancing in the last two sessions.

Increasing crude prices will accelerate inflation in India, while also widening the country’s current account deficit.

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“Resistance for the Nifty 50 is placed around 16,800 levels. Until there is a clear breakout above this level and it is sustained there, a cautious to bearish outlook should be maintained,” said Yesha Shah, head of equity research at Samco Securities.

The country’s economy expanded 5.4% in the October-December quarter from a year earlier, according to official data, missing economists’ forecast of a 6% growth.

Indian equities in February marked their fifth straight month of fund outflows, with foreign investors dumping $4.74 billion worth of stocks, according to Refinitiv data.

The Nifty and Sensex fell over 3% last month, dragged by geopolitical tensions, concerns over inflation, fund outflows and expected rate hikes by the U.S. Federal Reserve.

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Oil prices rose above $110 a barrel on Wednesday, their highest since 2014, as sanctions on Russian banks hampered trade finance for crude shipments.

Nifty’s metal index and energy index were among the top performers, up 4.07% and 1.27%, respectively.

Coal India, the top gainer on the Nifty 50, rose nearly 9%. The miner said https://bit.ly/3vvjWBe coal production for February stood at 64.3 million tonnes, up 3.9% from a year-ago period.

Among decliners, Nifty’s financial services sector index , the private bank index and the auto index fell more than 2% each. (Reporting by Rama Venkat in Bengaluru; Editing by Subhranshu Sahu, Sherry Jacob-Phillips and Shailesh Kuber)

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