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Indian shares down; Nifty set for longest losing streak in 1-1/2 years

Analysts said investors were booking profits due to a lack of a clear domestic triggers and persisting worries about the impact from a ban on higher value banknotes.

Published: 22nd December 2016 01:43 PM  |   Last Updated: 22nd December 2016 01:43 PM   |  A+A-

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By Reuters

Indian shares fell on Thursday, pulling the NSE index down nearly 1 percent to below 8,000 points, as the country's cash crunch continued to weigh on corporate earnings expectations for the December quarter.

The NSE Nifty, which fell below the 8,000 mark for the first time since Nov. 25, was on track for a seventh straight session of declines, its longest losing streak in 1-1/2 years.

The index last recorded a seven-day losing streak in June 2015, when the India Meteorological Department cut its forecast for monsoon rainfall for the year.

Indian shares, like their regional counterparts, have taken a hit due to the Federal Reserve's hawkish U.S. interest rate forecast last week that led to foreign selling in emerging markets.

In India, foreign institutional investors have sold a net $250.28 million in shares this month as of Dec. 20.

Analysts said investors were booking profits due to a lack of a clear domestic triggers and persisting worries about the impact from a ban on higher value banknotes on the economy and corporate profits.

"There is no clarity in the expectations of earnings routes for investors," said Saurabh Jain, assistant vice-president of research at SMC Global Securities.

"Due to demonetization, earnings for the December quarter is expected to be tepid, and there are also expectations that the impact could be carried into the next fiscal year."

Nifty was down 0.92 percent at 7,987.35 as of 0602 GMT, while the benchmark BSE Sensex was trading 0.87 percent lower at 26,016.38. BSE hit its lowest since Nov. 25.

Blue chips continued to suffer, with financial stocks contributing nearly half the Nifty's decline on Thursday. Axis Bank fell as much as 1.8 percent.

Among other major decliners, IT stocks such as Infosys Ltd and Tata Consultancy Services were down more than 1 percent in thin trade.
 



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