(Updates levels, adds analysts' comments)
By Bharath Rajeswaran and Nishit Navin
BENGALURU, Feb 27 (Reuters) - Indian shares fell on
Monday, dragged by I.T. stocks, with the benchmark Nifty
slipping below a key long-term average for the first time in
over four months after U.S. data reinforced fears of a prolonged
high-interest rate regime.
The Nifty 50 index fell 0.84% to 17,320.50, while
the S&P BSE Sensex edged 0.76% lower to 59,013.02 as of
10:46 a.m. IST.
The 50-share NSE index fell below the 200-day moving average
of 17,376.21 for the first time since early October.
Nine of the 13 sectoral indexes declined, led by a 2.5% drop
in high-weightage information technology with all of
its 10 constituents in the red.
The drop in the IT sector, which earns a significant share
of its revenue from the United States, comes as Wall Street slid
after data showed the personal consumption expenditures price
index, the U.S. Federal Reserve's preferred inflation measure,
accelerated in January.
"Better-than-expected economic data coming out of the U.S.
and U.K indicate that instead of one more hike there will be two
or three more hikes," said Gaurav Dua, senior vice-president and
head of capital market strategy at Sharekhan.
Fed futures now have rates peaking around 5.42%, suggesting
at least three more hikes from the current 4.50-4.75% band. Meanwhile, prospects of another Bank of England interest
rate hike in March rose after last week's buoyant Composite
Purchasing Managers Index data in February. The withdrawal of liquidity due to sustained foreign fund
outflows has added to the pressure on domestic markets, analysts
added.
Foreign portfolio investors sold 311.65 billion rupees
($3.76 billion) of Indian equities thus far in the year,
according to official
data
.
Among individual stocks, Bajaj Auto fell as much
as 4.3% - the top loser in Nifty 50 - after a report
said that the company could take a steep cut in production of
motorcycles and three-wheelers across its export-focused plants
in March due to uncertainties in its top market, Nigeria.
($1 = 82.9200 Indian rupees)
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Nifty 50 slips below 200-day simple moving average ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Bharath Rajeswaran and Nishit Navin in Bengaluru;
Editing by Eileen Soreng and Dhanya Ann Thoppil)
+919769003463))
