Financial, consumer stocks lead slide in Indian shares

BENGALURU, Aug 11 (Reuters) - Indian shares fell on Friday, dragged by financials on the central banks move to mop-up excess liquidity as well as consumer stocks on near-term domestic price concerns, offsetting optimism over moderating U.S. inflation.

The Nifty 50 (.NSEI) index was down 0.42% at 19,460.45, while the S&P BSE Sensex (.BSESN) fell 0.42% to 65,406.01 at 10:16 a.m. IST.

Ten of the 13 major sectoral indexes logged losses. High-weightage financials (.NIFTYFIN) lost as much as 0.52%.

Financials led losses in the previous session too after the Reserve of India asked banks to set aside a larger part of incremental deposits under the cash reserve ratio (CRR) to mop-up excess liquidity.

“August and September tend to be seasonally tight months on the liquidity front, led by festive season outgo and advance tax collections,” analysts at Nomura said in a note. “The added impact of this tightening could negatively impact wholesale financed institutions temporarily.”

Consumer stocks (.NIFTYFMCG) lost 0.6%, extending their decline from the previous session after the RBI flagged near-term inflation concerns and raised the retail inflation forecast for fiscal 2024.

“The MPCs (Monetary Policy Committee) cautious tone and no signal of any rate cut by this year end hurt market sentiment,” said Shrikant Chouhan head of research (retail) at Kotak Securities, adding “inflation continues to be a key concern\”.

The pharma index (.NIPHARM) shed over 1%, dragged by the post-earnings slide in Biocon(BION.NS) and Alkem Laboratories.

On the flipside, HCLTech (HCLT.NS) gained as much as 4.64% and was the top Nifty 50 gainer after announcing a global strategic partnership with Verizon for managed network services.

Including todays losses, both the benchmarks are down over 0.25% each this week, on course to extend losses for the third week in a row.

Asian markets remained subdued. Wall Street equities edged higher overnight as data showed moderation in U.S. inflation.