Markets declined on Friday, tracking a slide in global equities on fears that monetary policy tightening would slow down economic growth, and as the latest chapter in the Adani Group saga soured sentiment further.
The Nifty 50 index closed 0.21% lower at 17,856.50, while the S&P BSE Sensex fell 0.20% to 60,682.70.
Five of the 13 major sectoral indexes declined, with information technology and metal falling 0.4% and 1.8%, respectively.
Richmond Fed President Thomas Barkin added to the growing list of hawkish comments from Federal Reserve officials, sparking a slide in Asian stocks.
The commentary from Fed officials over the last two days indicates that the high-rates regime could likely last till the end of 2023 or even early 2024, said Narendra Solanki, head of equity research at Anand Rathi Shares & Stock Brokers.
However, Indian equities have a limited downside due to significant correction and markets will likely witness sideways movement in the next few weeks in the absence of any major triggers, two analysts said.
That correction was largely due to the fallout of Hindenburg Research's report on the Adani Group.
The latest news was that index provider MSCI plans to cut the weightings of Adani Enterprises and three other group firms, which, analysts said, could lead to outflows and a further slide in value.
India's market regulator is also probing Adani Group's links to some of the investors in the aborted $2.5 billion secondary share sale of the flagship Adani Enterprises, Reuters reported.
Adani Enterprises tumbled over 4% and was the top loser in the Nifty 50 index. Most Adani group stocks extended their decline in Friday's session.
Among individual stocks, Hindalco declined 2.56% as analysts raised demand concerns after the company's slide in quarterly earnings.
Paytm tumbled nearly 8% on reports that China's Alibaba Group had sold its remaining stake in the fintech company.
