IT, banks drag Indian shares down as US rate fears resurface

BENGALURU, Oct 13 (Reuters) - Indian shares declined on Friday, dragged by a slide in information technology (IT) and bank stocks, while inflation concerns in the United States hurt investor sentiment.

The NSE Nifty 50 index (.NSEI) closed 0.22% lower at 19,751.05, while the S&P BSE Sensex (.BSESN) fell 0.19% to 66,282.74.

Despite the fall on Friday, the benchmarks logged weekly gains of nearly 0.5% each, due to a relief rally earlier in the week on easing U.S. yields and dovish comments from U.S. Federal Reserve officials.

On the day, high weightage IT index (.NIFTYIT) lost 0.61% after Infosys (INFY.NS)

and HCLTech(HCLT.NS) cut their forecast.

Infosys fell 2.34%, while HCLTech shares were volatile, rising 2.63% after shedding 1.24% in early trading.

Bank index (.NSEBANK) lost 0.70%, dragged by a fall in the largest state-owned lender State Bank of India (SBI.NS) and private lender Axis Bank (AXBK.NS) after global brokerage UBS downgraded both.

\“Emerging market investors should add to property, banks and industrial stocks on any pullback in Indian markets,\” said Chris Wood, global head of equity strategy at Jefferies.

While Indias September retail inflation eased to a three-month low of 5.02%, the rise in U.S. consumer prices dragged global stocks.

\“India has clearly stood out in terms of macroeconomic fundamentals, managed to contain inflation better than developed markets\” Pramod Gubbi, the founder of Marcellus Investment Managers said.

\“The IT slide is due to short-term cyclical pressures reflective of high rates in the U.S. and weakness in BFSI (banking, financial services and insurance) segment.\”

Among individual stocks, Tata Motors jumped 4.73% to a record high, leading a 0.88% rise in Auto index (.NIFTYAUTO).

Nestle (NEST.NS) hit a record high after Citi raised its target price, citing strong growth prospects.

SpiceJet surged 19.33% on report that IndiGos co-founder Rakesh Gangawal was in talks to buy stake in the company.