Indian shares slip after strong rally; Vodafone Idea slumps 24%

FILE PHOTO: A general view of the Bombay Stock Exchange (BSE) in Mumbai, India, January 21, 2021. REUTERS/Francis Mascarenhas

BENGALURU (Reuters) – Indian shares took a breather on Thursday after surging more than 3% this week, as banking shares weighed, while troubled telecom operator Vodafone Idea tumbled 24% after its non-executive chairman stepped down.

By 0447 GMT, the blue-chip NSE Nifty 50 index and the S&P BSE Sensex fell 0.1% each to 16,240 and 54,306.96, respectively.

The Nifty Bank index, which rose over 2.3% in the previous session, declined 0.6%, while the public sector banking index dropped 2.4%.

“The market has moved up quite a bit this week and may pause a little. But, it still remains a buy-on-dips market … There is a lot of liquidity and one needs to remain cautious as a lot of initial public offerings (IPOs) are coming,” said Samrat Dasgupta, CEO of Esquire Capital Investment Advisors in Mumbai.

This week’s rally has been narrow and limited to some large-cap stocks, unlike previous ones, and that is all the more reason to be more cautious, Dasgupta also said.

Vodafone Idea slid after billionaire industrialist Kumar Mangalam Birla, who engineered the merger here of the India operations of Idea Cellular and Britain’s Vodafone Plc, stepped down as the company’s non-executive chairman on Wednesday.

Shares of the telecom operator, down nearly 44% this week, hit their lowest since May 15, 2020 to 4.55 rupees. Its major rival Bharti Airtel Ltd climbed 2.9%.

Meanwhile, U.S. Federal Reserve Vice Chair Richard Clarida — a major architect of the U.S. central bank’s new policy strategy — said in an overnight speech that he felt the conditions for raising rates could be met by the end of 2022.

The speech comes at a time Indian markets are closely watching the country’s central bank policy outcome on Friday for cues on liquidity even as it is mostly expected to be stay put on rates.

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