($1 = 81.5930 Indian rupees) (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio D'Souza)
+919769003463)) (Updates levels, adds analyst comments)
BENGALURU, Jan 31 (Reuters) - Indian shares fell
Tuesday, as financial stocks continued their slide since a
short-sellers attack on the Adani Group and IT stocks dropped
ahead of the Federal Reserve's policy decision, with investors
also cautious ahead of the Union budget.
After a volatile opening, the Nifty 50 index was
down 0.41% at 17,579.60 as of 11:12 a.m. IST, while the S&P BSE
Sensex fell 0.42% to 59,246.83.
The heavyweight financials index fell 0.3%,
continuing its drop in the wake of U.S-based Hindenburg
Research's report on the Adani Group.
The group's seven listed companies have lost $65 billion in
market value since the report on Wednesday, while financials
have fallen 4.23% on concerns about their exposure to the group.
"Financials have seen some pressure in the wake of the
Hindenburg report but the fundamentals continue to remain
strong," said Astha Jain, senior research analyst at Hem
Securities.
She expects the Nifty to find support at the 17,400 level,
but said volatility would surge over the next few sessions as
key events play out, starting with the Union budget on
Wednesday.
Besides the government's fiscal consolidation path and
borrowing calendar for fiscal 2024, traders will also watch for
any incentives to entice foreign investors.
FIIs have piled out of the market recently, having offloaded
151.65 billion rupees ($1.86 billion) worth of shares since the
Hindenburg report.
India is expected to peg GDP growth at 6-6.8% for 2023-24,
the slowest in three years, at its pre-budget economic survey
later in the day.
While most of the Adani Group stocks resumed their slide,
the flagship Adani Enterprises rose 4.15% on the last
day of its crucial $2.5 billion follow-on share offering.
IT stocks slid 1.5%, the most among the 13 major
sectors, with all the constituents logging losses.
The U.S. Federal Reserve's decision, due on Feb. 1, is key
for IT firms, which have major exposure to the United States.
The Fed is expected to raise rates by 25 basis points, but
Fed Chair Jerome Powell's speech will be scrutinized for any
signs of further increases.
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