Consumer stocks drag Indian shares down amid rising US rate woes

BENGALURU, Oct 20 (Reuters) - Indias blue-chip indexes fell on Friday, dragged by consumer stocks after mixed earnings from top companies, while U.S. Federal Reserve Chair Jerome Powells comments fanned worries over higher-for-longer interest rates.

The NSE Nifty 50 index (.NSEI) was down 0.25% at 19,575.60 as of 10:11 a.m. IST, and the S&P BSE Sensex (.BSESN) fell 0.20% to 65,497.81.

Consumer stocks (.NIFTYFMCG) lost 1%, with ITC (ITC.NS) falling 2% after posting a weaker-than-expected quarterly profit amid rising competition and high raw material costs.

Hindustan Unilever (HUL) (HLL.NS) shed 2% on sluggish recovery in quarterly sales volume. Both ITC and HUL were among the top Nifty 50 losers.

In contrast, Nestle India (NEST.NS) extended its post-earnings rally for the second session, adding 2% and topping Nifty 50 gainers. Nestle jumped 3.74% to a record high in the previous session after strong quarterly results.

Tata Motors (TAMO.NS) rose 1% after the auto maker said it will buy an almost 27% stake in digital logistics firm Freight Tiger.

Foreign selling is likely to continue amid elevated U.S. Treasury yields, two analysts said.

\“If the conflict gets broad based beyond just Israel and Palestine, there will be further adverse impact on crude prices, which will have its own ramifications,\” said Pramod Gubbi, founder of Marcellus Investment Managers.

Brent crude futures rose above $93 per barrel on fears the Israel-Hamas conflict could spread. Rising oil prices hurt net importers like India.

Asian markets (.MIAPJ000PUS) declined 0.4% following a fall in Wall Street equities overnight, while U.S. 10-year Treasury yields hit fresh 16-year highs, after Powell said further policy tightening could be needed to tame inflation.

Tata Communications (TATA.NS) fell nearly 3% on weak results, while Jindal Stainless climbed over 5% after its September-quarter profit more than doubled.

Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio DSouza nd Dhanya Ann Thoppil

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