Indian shares mark worst day in 2 weeks as private-sector lenders drag

Tata Consumer Products

07/02/2022 10:44

(Adds analyst comment, closing levels)
    By Sethuraman N R
    BENGALURU, Feb 7 (Reuters) - Indian shares recorded their
worst session in two weeks on Monday, dragged by private-sector
lenders and consumer stocks, while a slew of strong earnings
from state-controlled banks helped limit more losses.
    The blue-chip NSE Nifty 50 index  .NSEI  fell 1.73% to
17,213.60, while the S&P BSE Sensex  .BSESN  dropped 1.75% to
57,621.19. Both indexes fell for a third straight session.
    Economists polled by Reuters expect India's central bank on
Thursday to hold its repo rate steady but increase its reverse
repo rate as part of a process to reduce surplus liquidity
poured into markets earlier in the pandemic.   urn:newsml:reuters.com:*:nL4N2UI1CZ
    The market is factoring in the upcoming monetary
announcement and increasing crude oil prices, said Rahul Sharma,
head of research, Equity99 Advisors.
    "The bank Nifty is witnessing selling pressure due to high
inflation expectations. If the interest rate hike comes in, then
people will withdraw the liquid funds from every risky asset."
    In Mumbai trading, private-sector lender HDFC Bank
 HDBK.NS , heavyweight shadow lender Bajaj Finance  BJFN.NS  and
Tata Consumer Products  TACN.NS  were the Nifty's top drags,
falling more than 3% each.    
    The Nifty PSU Bank index  .NIFTYPSU , which tracks
state-owned lenders, surged as much as 4.7% to its highest since
July 2019.
    State Bank of India  SBI.NS , India's largest lender, rose
as much as 3.5% after reporting stronger-than-expected earnings.
Smaller peer Bank of Baroda  BOB.NS  jumped nearly 10% after its
quarterly profit more than doubled.  urn:newsml:reuters.com:*:nL1N2UG04Q
    Analysts said continued foreign investment outflows due to
expectations of a surge in U.S. interest rates were also
weighing on the market.
    Foreigner investors have sold Indian equity worth $4.94
billion this year as of Friday's close, compared with $3.62
billion worth of net buying in the same period last year,
Refinitiv data showed. 
    India's bond and forex markets were shut due to a public
holiday in the state of Maharashtra.  urn:newsml:reuters.com:*:nL1N2UH0CG

 (Reporting by Nallur Sethuraman and Gaurav Dogra in Bengaluru;
Editing by Ramakrishnan M.)
 ((Sethuraman.NR@thomsonreuters.com; (+91 8061822737); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))