Metals, banks lead drop in Indian shares; Fed decision eyed
People walk past the Bombay Stock Exchange (BSE) building in Mumbai, India, November 4, 2020. REUTERS/Francis Mascarenhas/File Photo Acquire Licensing Rights
BENGALURU, Nov 1 (Reuters) - Indian shares fell on Wednesday, dragged by weakness in metals due to weak economic data from China and on jitters ahead of the U.S. Federal Reserve's policy decision.
The NSE Nifty 50 index (.NSEI) was down 0.16% at 19,048.05 as of 10:32 a.m. IST, while the S&P BSE Sensex (.BSESN) fell 0.21% to 63,744.73.
Eight of the 13 major sectors declined. Metals (.NIFTYMET) lost 0.5% after data showed a contraction in factory activity in China, the top consumer of metals. JSW Steel (JSTL.NS), Tata Steel (TISC.NS) were among the top Nifty 50 losers.
"A large correction in domestic equities is unlikely, but persistent foreign selling and a likely hawkish Federal Reserve commentary could lead to near-term consolidation in domestic equities," said Saurabh Jain, assistant vice president - research, retail equities at SMC Global Securities.
The Fed is widely expected to hold rates in its policy decision after the bell on Wednesday, but any indication of keeping rates higher for longer will weigh on equities, especially IT stocks.
IT stocks were flat on the day, after having fallen 3.8% last month due to weak results from major companies and fears of prolonged high rates in the United States, a key market.
High weightage banks (.NSEBANK) lost 0.3%. The more-domestically focussed small- (.NIFSMCP100) and mid-caps (.NIFMDCP100) outperformed the benchmarks, rose 0.5% and 0.1%, respectively.
Auto index (.NIFTYAUTO) rose 0.25%, led by a 2.5% rise in Bajaj Auto (BAJA.NS) after the two-wheeler maker posted a 19% rise in total sales in October. Bajaj Auto was among the top Nifty 50 gainers.
Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman and Savio D'Souza
Our Standards: The Thomson Reuters Trust Principles.
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