Indian shares fall on US rate-hike worries

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Indian shares fell on Monday after U.S. export prices data last week stoked fresh fears that the Federal Reserve would keep interest rates higher for longer, while investors waited for minutes of the Fed’s meeting due on Wednesday.

The Nifty 50 index (.NSEI) closed 0.56% lower at 17,844.60, while the S&P BSE Sensex (.BSESN) fell 0.51% at 60,691.54. The benchmarks struggled for direction in the first half of the day, before settling lower to extend losses for a second straight session.

“Inflation remains the number one risk to global markets,” said Pramod Gubbi, co-founder of Marcellus Investment Managers. Eleven of the 13 major sectoral indexes fell with heavyweight financials (.NIFTYFIN) losing nearly 1% and pharma index (.NIPHARM) shedding 0.81%.

Cipla (CIPL.NS), the second-highest weighted stock in the pharma index, tumbled over 6% to a nearseven-month low after the company’s Pithampur unit received eight observations from the U.S. drug regulator after inspection.

The top two stocks in Nifty 50 in terms of weightage – Reliance Industries (RELI.NS) and HDFC Bank (HDBK.NS) fell nearly 1% each and led the slide in the benchmark.

Information technology stocks (.NIFTYIT) rose

Ericsson to cut 1,400 jobs in Sweden

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Telecoms gear maker Ericsson (ERICb.ST) plans to cut about 1,400 jobs in Sweden as part of a broader plan to reduce costs globally, it said on Monday. The company had earlier announced plans to cut costs by 9 billion crowns ($880 million) by the end of 2023 as demand slows in some markets, including North America.

Further job cuts, numbering several thousands in other countries, are likely to be announced in the coming days, said two sources close to the matter. over 0.5%, with nine of the 10 constituents gaining on Monday. The recent correction in IT stocks have made their valuations attractive, and long-term investors are increasing allocations to utilise the opportunity, three analysts said.

Ericsson last made deep cuts in 2017 when it laid off thousands of employees and focused on research to pull the company out of losses. The company was negotiating with its employee union in Sweden for months on how to handle cost cuts. Agreement has now been reached with Swedish unions on how to manage headcount reductions, a spokesperson said, adding that the company intends to make the cuts through a voluntary programme.

Since the start of 2022, the IT index (.NIFTYIT) has lost nearly 20% compared to 3% rise in the Nifty 50 (.NSEI) index.

The ongoing concerns over the future rate-hiking path in the U.S. remained an overhang after official data showed a rise in export prices in January.

Investors await the minutes of the Fed’s meeting, due on Wednesday, to assess the U.S. central bank’s future rate hiking path. U.S. markets are closed on Monday for Presidents’ Day.