BENGALURU: India’s benchmark indexes logged their worst week in three months on Friday amid jitters ahead of a crucial U.S. jobs report that could determine the size and speed of the Federal Reserve’s interest rate cuts.
The Nifty 50 index ended 1.17% lower at 24,852.15 points, while the S&P BSE Sensex lost 1.24% to 81,183.93.
The blue-chip indexes lost about 1.5% this week, snapping a three-week winning streak and easing off record high levels hit on Monday after latest U.S. economic data raised fears that the Fed has perhaps waited too long to lower rates.
“The overheated segments of the markets have seen some profit booking… From a global perspective the focus is now on the economic data coming from the U.S. to gauge the direction and the quantum of Fed fund rate movement in the upcoming FOMC (Federal Open Market Committee) meet,” said Joseph Thomas, head of research at Emkay Wealth Management.
Worries over a slowdown in the U.S. labour market re-emerged after data showed soft job openings overall and fewer job gains in the private sector, raising expectations of a 50-basis-point rate cut this month.
Indian shares likely to open flat ahead of US jobs data
The U.S. non-farm payroll report for August, due at 6:00 p.m. IST (1230 GMT), will give clarity on the health of the labour market.
A weak report will raise the odds of a 50-bp cut, while a report showing a recovery in the labour market will bolster bets of a 25-bp cut.
For the week, state-owned banks, energy, metal and auto stocks were among the top sectoral losers by percentage, dropping between 2.5% and 5%.
All the 13 major sectors fell on Friday. The more domestically-focussed small- and mid-caps fell 1.25% and 1.59%, respectively.
Among individual stocks, State Bank of India, the country’s largest state-owned lender, lost about 4.5% after Goldman Sachs downgraded the stock to “sell” from “neutral”, citing rising headwinds to growth, margins and credit costs.
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