Indian shares fall as financials, IT stocks weigh

BENGALURU, June 2 (Reuters) - Indian shares slipped on Wednesday, weighed down by financials and information technology stocks, with investors also worried over high valuations following a recent rally.

The blue-chip NSE Nifty 50 index fell 0.48% to 15,500.85 by 0503 GMT, while the benchmark S&P BSE Sensex shed 0.64% to 51,597.22.

“In the medium term, the market should still be positive as economic growth will pick up gradually with capex cycle picking up. But, in the short term, there is a risk of a correction and consolidation in the market as it has run ahead of valuations and is expensive,” said Neeraj Dewan, director at Quantum Securities.

The next upmove will be based on how the economy will be opening up again with relaxations given to lockdowns, he said.

Software services firm Infosys Ltd and mortgage lender HDFC Ltd were among the top drags to the Nifty 50, falling 1.4% and 1%, respectively. HDFC has risen in the last six trading sessions out of eight.

Among other losers, cigarettes-to-hotels conglomerate ITC Ltd fell 1.9% after its March-quarter profit slipped.

While the market’s sentiment recently has remained upbeat due to a steady decline in daily COVID-19 cases, several economists have warned about the huge second coronavirus wave’s impact on the economic growth for the current quarter.

On Wednesday, the country reported 132,788 new cases of COVID-19, well below the 200,000-mark for sixth day. Deaths rose by 3,207.

In Asian markets, shares edged up to near three-month highs and global equities held steady near a record, as data showing higher U.S. manufacturing activity in May cheered investors looking for signs of a continued rebound in the world’s largest economy.

Reporting by Rama Venkat in Bengaluru; editing by Uttaresh.V