The decline was led by the top three software outsourcers who earn more than half their revenue from the United States.
By 10:50 am, the BSE 30-share index Sensex was trading down 0.2% at 18,419.49, with 20 of its components declining.
“The US data has spooked the markets, yes, but not that much. Today it might languish a little, depending on Europe. But It seems breather as a positive.US stocks tumbled to their lowest close in nearly a month as the Federal Reserve Bank of Philadelphia reported an unexpected contraction in manufacturing in the Mid-Atlantic region and new US jobless claims hit a nine-month high.
The Sensex, which has gained over 5% so far this year, has risen in the last three sessions propped by a robust domestic growth outlook and foreign funds buying shares, which totals $11.8 billion so far.
India’s economy, Asia’s third-largest, is forecast to expand 8.5% this year, the fastest pace among major economies after China. The growth is expected to drive consumer spending and demand for loans.
“Despite valuations being stretched, thereis not seen serious selling coming in,” “There will be a short-term impact but a strong outlook for India’s growth should see the market charting its own course.”
India’s No. 1 technology firm, Tata Consultancy Services, fell 0.3%, Infosys Technologies Ltd slipped 1.5% while Wipro was down 1%.
Bank counters, which had seen positive momentum in the past few sessions on a firm demand outlook, also took a breather in select stocks. India’s No. 2 lender, ICICI Bank, was down 1% while HDFC Bank dipped 0.9%.
However, top lender State Bank of India was up 0.2%.
Jet Airways also bucked the trend to rise 6.7% to a 12-month high after the Economic Times said the airline had sought Reserve Bank of India approval to raise a Rs3,450 crore ($742 million) foreign loan to repay higher-cost domestic debt.
In the broader market, gainers outnumbered losers in a ratio of 1.2:1 on volume of 138.3 million shares.
Elsewhere, the MSCI’s measure of Asian markets other than Japan was down over 0.8%, while Japan’s Nikkei fell 1.8%.
The NSE 50-share index Nifty was down 0.2% at 5,528.95 points.
