(Updates closing levels)
By Bharath Rajeswaran
BENGALURU, May 5 (Reuters) - Indian shares declined on
Friday and erased weekly gains amid weakness in financials
stocks due to declines in Housing Development Finance Corp and
HDFC Bank, and persistent fears over the U.S. banking sector.
The Nifty 50 closed 1.02% lower at 18,069.00, while
the S&P BSE Sensex lost 1.13% to 61,054.29.
Financials stocks led the slide in the Nifty,
falling 2.34% in the worst single-day drop in over three months.
Housing Development Finance Corp Ltd and HDFC Bank
Ltd declined over 5.5% each after MSCI said it
included the merged entity of the two companies in its large-cap
index, but with an adjustment factor of 0.5.
Nuvama Research estimated this would lead to an outflow of
$150 million to $200 million from the entity.
"The event is one-time, but the businesses of HDFC and HDFC
Bank are perpetual," said Avinash Gorakshakar, head of research
at Profitmart Securities, adding that the fall in the shares is
temporary.
Analysts expected Nifty 50 to consolidate after the recent
rise on strong March-quarter earnings, but added that monsoons
would be a key monitorable in the near term.
"If monsoons are poor, it will spark a slide in markets due
to adverse impact on the country's predominantly agri-linked
economy and consumption," Gorakshakar added.
European Central Bank's rate hike and concerns in the
U.S. banking sector due to the collapse of PacWest Bancorp also
dragged investor sentiment.
Among individual stocks, TVS Motor Company Ltd jumped nearly 4% to a record high after reporting an uptick in
March-quarter profit.
The auto index rose 0.40% and was among the top
sectoral gainers in a weak market.
Shares of shadow lender Manappuram Finance Ltd fell over 11% after India's financial crime agency, Enforcement
Directorate said it froze assets of the company worth 1.43 bln
rupees.
($1 = 81.6540 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by
Nivedita Bhattacharjee and Varun H K)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.