BENGALURU: Indian shares fell on Wednesday after the International Monetary Fund cut its economic growth forecast for the country for the second time in nearly four months, while Wipro’s quarterly profit miss also weighed on sentiment.
The NSE Nifty 50 index fell 0.76% to 11,844.50 as of 0504 GMT, while the S&P BSE Sensex was down 0.65%% at 40,364.26. The indexes are set to snap nine straight sessions of gains.
“One should book a little bit of profit because the market has run up too fast… valuations are a bit stretched,” Samrat Dasgupta, chief executive officer at Esquire Capital Investment Advisors.
The IMF cut its forecast for India’s GDP growth, which fell at its steepest pace of 23.9% in the June quarter. It now expects Asia’s third-largest economy to contract 10.3% for the fiscal year compared with its June prediction of a 4.5% drop.
“It (the GDP forecast) won’t affect India’s borrowing calendar but the country needs to be cautious on borrowing because it is one notch above junk rating,” Dasgupta said.
The Nifty Bank index fell 1.1% ahead of a hearing at the country’s top court on interest waivers for loans under moratorium.
Indian banks are hoping that borrowers will not be given further respite beyond the waiver on compound interest for loans up to 20 million rupees for six months, which the government has agreed to pay.
Meanwhile, global market sentiment was dampened after J&J’s COVID-19 vaccine trials were halted because of an unexplained illness in a study participant.
Weakness in IT stocks also weighed. Wipro Ltd fell 6.5% and was the top percentage loser on the Nifty 50 after reporting a quarterly profit that missed market expectations.
The Nifty IT index was down 0.8%.
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