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India Shares Fall, U.S. Data Triggers Foreign Outflow Worries

BENGALURU, Feb 11 (Reuters) - Indian shares fell sharply on Friday, as investors worried about foreign fund outflows after red-hot U.S. inflation data fuelled bets on aggressive interest rate hikes by the Federal Reserve.

The NSE Nifty 50 index fell 1.5% to 17,343.50, as of 0455 GMT, while the S&P BSE Sensex was down 1.5% at 58,019.69. For the week, both the indexes were down over 1%.

The Indian central bank on Thursday maintained its dovish stance and said continued policy support was warranted to help the economic recovery.

"There was some enthusiasm post (RBI) policy. But, with global cues, again the (foreign) outflows are going to happen. Though we are at status quo currently, if the rate hike happens in March in the U.S., the outflows will continue," said Anita Gandhi, director at Arihant Capital Markets.

Foreign investors have sold a net $5.58 billion in Indian equities so far this year, Refinitiv data showed, compared with a net purchase of $5.08 billion in the same period last year.

Asian stocks fell on Friday, following U.S. markets which had sold off more aggressively overnight after data showed consumer prices rose solidly in January, leading to the biggest annual increase in inflation in 40 years.

The Nifty IT index was the top loser among sub-indexes, falling 2.6%.

"IT valuations are quite high. Though last-quarter numbers were pretty good, it is only Infosys where there is a talk of margin expansion or better guidance. Unless we are going to have an exponential rise (in results), the valuation is not justified," Gandhi said.

Among individual stocks, Quess Corp rose as much as 9.7% after a jump in quarterly profit.

Indian food delivery firm Zomato Ltd tumbled 8.4%, as sequential order value growth (GOV) underwhelmed in the third quarter.

Reporting by Nallur Sethuraman and Gaurav Dogra in Bengaluru; Editing by Shailesh Kuber and Subhranshu Sahu

Source: Reuters

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