INDIA STOCKS-Indian shares sink to weekly losses on fading rate cut hopes

Credit: REUTERS/FRANCIS MASCARENHAS

By Bharath Rajeswaran

BENGALURU, Feb 9 (Reuters) - Indian shares were muted on Friday and logged weekly losses, weighed down by financials and consumer stocks, as investors digested the fading likelihood of early rate cuts in India and the United States.

The NSE Nifty 50 .NSEI and BSE Sensex .BSESN dropped 0.33% and 0.68%, respectively for the week.

"When valuations are high, the bears will use any negative news to drag the market down," said VK Vijayakumar, chief investment strategist at Geojit Financial Services, referring to "slightly hawkish comments" from the Reserve Bank of India (RBI)governor on Thursday.

The RBI kept interest rates unchanged on Thursday, as expected, and signaled rate cuts may not be imminent.

On the day, the Nifty and Sensex struggled for direction, before closing marginally higher, led by a rebound in the final two hours in financials after Thursday's slide.

The Nifty 50 settled 0.30% higher at 21,782.50, while Sensex rose 0.23% to 71,595.49.

Heavyweight financials .NIFTYFIN shed 1.13% for the week. They have dropped roughly 6% since Jan. 16, when top private HDFC Bank HDBK.NS posted disappointing quarterly results.

Consumer stocks .NIFTYFMCG dropped 2.27% for the week, led by a 5.7% fall in heavyweight ITC ITC.NS, which posted its worst week since October 2021.

ITC's top shareholder, British American Tobacco BATS.L, said it plans to monetise some of its stake.

Information technology .NIFTYIT stocks, however, added 1% for the week after resilient services and labour market data raised hopes of a soft landing for the U.S. economy, a key source of revenue for the sector.

Oil & gas .NIFOILGAS added about 4% for the week, helped by sustained post-results rally in key constituents like Bharat Petroleum Corporation BPCL.NS and Hindustan Petroleum Corporation HPCL.NS.

The broader, more-domestically focused small-caps .NIFSMCP100closed flat, while mid-caps .NIFMDCP100 added 0.85% for the week. Both indexes logged their worst session in more than two weeks on Friday.

Among individual stocks, Paytm PAYT.NStumbled through the week, down 45% since Jan. 31, when the RBI ordered its banking arm to stop business.

Weekly performance of India's key sectoral indexes https://reut.rs/4bwCyTR

India's Nifty volatility index hovers around 10-month high https://reut.rs/3SQabcc

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio D'Souza and Sonia Cheema)

((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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