Stocks slip as COVID-19 cases rise, inflation worries flare
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Indian shares ended lower on Monday, as COVID-19 cases surged again and government data showed that retail inflation rose to a three-month high in February.
The NSE Nifty 50 index closed 0.67% lower at 14,929.50, while the benchmark S&P BSE Sensex ended down 0.78% at 50,395.08. Both indices fell as much as 1.9% and 1.96%, respectively, earlier in the session.
India is grappling with a renewed surge in COVID-19 cases, led mainly by a jump in infections in Maharashtra. The country reported this year’s biggest daily rise in cases of 26,291 on Monday. India is the third-worst affected country with 11.39 million cases, behind the United States and Brazil. Government data after market hours on Friday showed retail inflation quickened to 5.03% in February on higher fuel prices, which could challenge the central bank’s accommodative stance. Core inflation was estimated in a range of 5.61%-5.9% by four economists.
In domestic trading, financial stocks were the biggest drag. The Nifty Bank Index and the Nifty Financial Services Index shed 0.88% and 1.24%, respectively. HDFC Bank was the top drag on the Nifty 50, falling 1.5%.
Information technology stocks provided some support to the main indices later in the session, helping them recoup some losses. The Nifty IT index gained 0.56%, with Tech Mahindra rising 2.3% and providing the biggest boost to the Nifty 50.
Global shares were trading higher, as investors bet on a faster economic recovery after a $1.9 trillion U.S. stimulus bill was signed into law last week.
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