INDIA STOCKS-Indian shares drop as IT, metals weigh; small-, mid-caps underperform

Credit: REUTERS/Niharika Kulkarni

By Bharath Rajeswaran and Kashish Tandon

BENGALURU, March 6 (Reuters) - Indian shares fell on Wednesday, weighed by information technology stocks, while energy and metals fell on a lack of major economic stimulus measures from China.

The blue-chip NSE Nifty 50 .NSEI shed 0.27% to 22,294.95 as of 10:51 a.m. IST, while the BSE Sensex .BSESN dropped 0.21% to 73,526.76.

Meanwhile, the broader and more domestically focused small-caps .NIFSMCP and mid-caps .NIFMDCP fell 2.3% and 1.4%, respectively, amid persisting concerns of excessive fund inflows.

"We may see some continuation in selling pressure in the segments even though some outflows have already happened," said Anita Gandhi, founder and head of institution at Arihant Capital.

Since the country's markets regulator asked for more disclosures from mutual funds on risks in the segments last month, small-caps have lost 4.2% while mid-caps fell 1.5%, underperforming a 0.4% increase in the Nifty 50.

"Once the March results are in, we will get to know more about the valuations in the segments," Gandhi added.

Ten of the major 13 sectors declined, with IT .NIFTYIT dropping 1.2%. The index has fallen 2.35% in the previous two sessions amid rising concerns over near-term earnings outlook.

Investors are also awaiting Federal Reserve Chair Jerome Powell's congressional testimony due on Wednesday and Thursday, and key labour market data on Friday for clues on timing of interest rate cuts.

IT companies earn a significant chunk of revenue from the United States.

Meanwhile, energy .NIFTYENR and metals .NIFTYMET lost 1.5% each on concerns over demand growth and lack of major stimulus measures in China, the world's biggest crude importer and top producer and consumer of metals.

Financial services .NIFTYFIN capped index losses with gains of 0.6%.

Among individual stocks, JM Financial JMSH.NStumbled 16%, a day after the Reserve Bank of India ordered the company's unit to stop lending against shares and debentures.

IIFL Finance IIFL.NSlost 20% for a second straight session after the RBI ordered it to stop offering gold loans. The stock was the top percentage loser on the small-cap index.

(Reporting by Bharath Rajeswaran and Kashish Tandon in Bengaluru; Editing by Varun H K)

((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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