Indian shares suffer biggest weekly drop in two years
- 17 Jun 2022
Indian shares ended lower on Friday to post their biggest weekly decline in more than two years, drubbed by worries that rapid increases in interest rates to tame stubborn inflation could derail economic growth.
The NSE Nifty 50 index fell 0.44 per cent to 15,293.5, while the S&P BSE Sensex fell 0.26 per cent to 51,360.42. Both the indexes touched more than one-year lows in their sixth straight session of losses.
The blue-chip indexes logged losses of around 5.5 per cent each for a week that saw the US Federal Reserve hike interest rates by 75 basis points and the Swiss National Bank deliver its first rate hike in 15 years.
Analysts have said selling by foreign investors and fears of damage to economic recovery from aggressive monetary policy tightening were causing jitters in the market.
Foreign investors have withdrawn a net $3.64 billion from Indian equities this month after selling a net $5.18 billion in May.
“The rising cost of capital will impact valuation multiples and have an adverse impact on economic growth and corporate earnings,” said Gaurav Dua, head of capital market strategy at Sharekhan.
The Nifty IT index and the Nifty Pharma index, which track some companies that are exposed to the US market, were among the worst performing sub-indexes on Friday, falling 1.5 per cent and 2.2 per cent, respectively.
The Nifty IT index posted a weekly drop of around 8 per cent.
