Indian stocks extend losses with US Fed meeting in focus

A broker reacts while trading on his computer terminal at a securities brokerage firm in Mumbai, India, February 26, 2016. REUTERS/Shailesh Andrade

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BENGALURU, May 2 (Reuters) – Indian stocks started May on a lukewarm note, with losses seen across the board following a sharp selloff on Wall Street on Friday as investors waited cautiously a rate hike expected by the Federal Reserve this week .

The NSE Nifty 50 index (.NSEI) fell 0.65% to 16,991.05, 0455 GMT on Monday, with its main sub-indices negative, while the S&P BSE Sensex (.BSESN) fell 0 .65% to 56,687.60. Benchmarks had posted losses on Friday for a third consecutive week.

Nifty’s IT (.NIFTYIT), automotive (.NIFTYAUTO) and metals (.NIFTYMET) sub-indexes were among the biggest losers in the segment, falling between 0.7% and nearly 2%.

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“The sharp sell-off in U.S. markets on Friday is an indication of the jitters and fear in the market caused by an increasingly hawkish Fed, the rising dollar index and the protracted war in Ukraine,” he said. VK Vijayakumar, Chief Investment Strategist at Geojit Financial. Services, adding that market volatility is expected to continue for some time.

Several Asian markets are closed for a public holiday, while Indian markets will be closed on Tuesday.

Investors are also focused on the Federal Reserve, which is expected to aggressively raise rates by 50 basis points at the end of the US central bank meeting on Wednesday.

Market participants will be watching for signals regarding the future path of interest rates, the Fed’s plans to shrink its balance sheet and its view of when inflationary pressures will recede.

Nifty Components 50 Britannia Industries (BRIT.NS) fell 1.4%, while HDFC Ltd (HDFC.NS) climbed 1% ahead of its quarterly earnings update due later in the day.

IT services provider Wipro (WIPR.NS) fell 2.7% and is among the biggest losers in the Nifty 50. The company reported last week that margin pressure would continue over the next two to three quarters. Read more

Mahindra & Mahindra (MAHM.NS), which was the lone gainer in the Nifty auto sub-index, edged up 0.16% after the automaker said domestic passenger vehicle sales for April rose by 23% YoY.

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Reporting by Rama Venkat in Bengaluru; Editing by Vinay Dwivedi and Sherry Jacob-Phillips

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