Mounting US rate worries, crude spike drag Indian shares to weekly losses

By Bharath Rajeswaran

BENGALURU (Reuters) -India’s blue-chip indexes fell on Friday and logged weekly gains, dragged by consumer stocks on lacklustre earnings, while U.S. rate worries and rise in crude prices hurt sentiment.

The NSE Nifty 50 index closed 0.42% lower at 19,542.65, while the S&P BSE Sensex fell 0.35% to 65,397.62. Both the benchmarks lost over 1% for the week.

Consumer stocks lost 1.32%, with ITC falling 2.69% after posting a weaker-than-expected quarterly profit amid rising competition and high raw material costs.

Hindustan Unilever (HUL) shed 2.08% on sluggish recovery in quarterly sales volume. Both ITC and HUL were among the top Nifty 50 losers.

Besides consumer, metals, realty, public sector banks and oil and gas also lost over 1% each, on broad-based selling pressure.

Private lender IndusInd Bank extended gains for second session, adding 1.29% on strong results, while Kotak Mahindra Bank rose 1.79% ahead of its quarterly earnings on Saturday. The two banks were the top Nifty 50 gainers.

Asian markets declined 0.57% and hit 11-month lows, while U.S. 10-year Treasury yields hit fresh 16-year highs, after Federal Reserve Chair Jerome Powell said further policy tightening could be needed to tame inflation. [MKTS/GLOB]

“The impact of the foreign investors (inflows) on Indian markets is undeniable,” Avinash Gorakshakar, director of research at Profitmart Securities said, adding “new dollar is unlikely to come to emerging markets like India due to elevated U.S. yields”.

Brent crude futures rose above $93 per barrel on Friday, on fears the Israel-Hamas conflict could spread.[O/R] Rising oil prices hurt net importers like India.

“Besides rates, if the geopolitical conflict in the Middle East extends till December, it could trigger a short-term correction in Indian equities due to crude uptick,” Gorakshakar added.

Indraprastha Gas tumbled 11.90% on concerns of slide in volumes after Delhi government’s proposed policy on electric vehicle adoption by cab aggregators, e-commerce firms and delivery services.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio D’Souza and Dhanya Ann Thoppil)