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Indian shares closed at nearly a four-week low on Thursday, pressured by losses in information technology and consumer stocks as the global markets extended weakness on worries over higher interest rates and crude prices.
The Nifty 50 closed down 0.98% at 19,523.55 points, lowest close since Sept. 1, while the S&P BSE Sensex slid 0.92% to 65,508.32 points. The benchmarks opened 0.2% higher.
"The move is more to do with global risk-off sentiment, with institutions booking profits ... The likelihood of higher interest rates is very high and it will have an adverse impact on equity valuations," said Aishvarya Dadheech, chief investment officer at Fident Asset Management.
Surging U.S. Treasury yields and the dollar on fears that interest rates will remain higher for longer has been weighing on the global equity markets since the Federal Reserve struck a hawkish tone earlier in the month.
All sectoral indexes closed in the red, with information technology stocks leading losses with a 2.2% fall, followed by a 1.9% drop in fast moving consumer goods and a 1.2% slide in autos.
The market is a bit jittery on the IT stocks over higher interests in the U.S. and expectations are not that great for IT companies in the coming quarter, Dadheech said.
Crude prices, which rose 3% overnight will hurt India, the world's third-largest importer, which is also reeling under lower-than-expected monsoon rains, triggering inflation risks.
Higher crude prices weighed on paint companies, which use oil as a crucial raw material, with Asian Paints falling 4% and Berger Paints dropping 3%.
Tech Mahindra was the top loser in the Nifty 50 index, dropping 4.6%, while Larsen and Toubro was the top gainer, rising 1.5%. (Reporting by Sethuraman NR in Bengaluru; Editing by Sohini Goswami)