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Indian shares drop over 2% on inflation worries, IT leads losses

Reuters . Bengaluru
20 May 2022 00:00:00 | Update: 20 May 2022 06:55:48
Indian shares drop over 2% on inflation worries, IT leads losses

Indian shares fell more than 2 per cent on Thursday, hammered by losses in technology and metal stocks, with investors globally dumping riskier assets as soaring inflation stokes fears of an economic slowdown.

The NSE Nifty 50 index ended down 2.65 per cent at 15,809.40, while the S&P BSE Sensex  dropped 2.61 per cent to 52,792.23.

The benchmark indexes that were up more than 2 per cent for the week as of Wednesday, erased most of those gains in their second straight session of declines. They have fallen nearly 7 per cent so far this month.

Asian and European shares also tumbled after a brutal selloff on Wednesday on Wall Street that saw the S&P 500 falling the most since June 2020.

“The domestic market has resumed a downtrend taking cues from our global counterparts, U.S. markets specifically,” said Ajit Mishra, vice president, research at Religare Broking.

All major nifty sub-indexes fell, with the Nifty IT index leading losses, down 5.74 per cent. Earlier in the session, the sub-index dropped to its lowest since June last year.

J.P. Morgan analysts said on Thursday surging inflation, supply-chain issues and the hit from the Ukraine war will bring an end to the growth boom that India’s IT services industry enjoyed during the pandemic. 

IT stocks were the top five percentage losers on the Nifty, with Infosys , Wipro , HCL Technologies , Tech Mahindra  and Tata Consultancy Services plunging between 5 per cent and 6 per cent.

Nifty’s metal index dropped 4.1 per cent led by a 5.2 per cent drop in Steel Authority of India.

IT  rose 3.3 per cent and was one of the three gainers on the Nifty, after the cigarettes-to-hotel conglomerate late on Wednesday reported a jump in March-quarter profit.

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