BENGALURU, Dec. 6 (BNA): Indian stocks traded lower on Tuesday, led by a drop in technology stocks, after an unexpected rebound in services activity in the US raised concerns about a lengthy rate hike cycle by the Federal Reserve.
The S&P BSE Sensex was down 0.51%, at 62509.29, as of 11:10am IST. The NSE Nifty 50 Index fell 0.52% to 18,604.60.
All major sector indices declined, led by a 1.29% decline in information technology stocks, followed by a 1% decline in the metals index, Reuters reported.
US services activity rebounded in November, after strong US payroll data and wage growth challenged hopes that the Fed might slow the pace and severity of interest rate hikes amid recent signs of slowing inflation.
Meanwhile, local traders awaited the RBI’s monetary policy decision on Wednesday, in which the central bank is expected to raise interest rates by 35 basis points.
Some analysts said that while strong economic data from the US raised concerns about the Fed’s hawkish stance, the RBI’s policy may not have a one-on-one relationship with the Fed, given signs of moderating inflation in India.
India’s annual retail inflation eased to a three-month low in October, supported by a slower rise in food prices and a higher underlying effect.
“The Reserve Bank of India will focus more on growth and will take its liberty to support growth,” said G Chokalingam, founder and director of Mumbai-based research and advisory firm Equinomics.
Among stocks, Hindalco Industries Tata Steel JSW Steel was the biggest loser from Nifty, dropping between 2.7% and 1.9%.
SM