BSE Sensex falls on US Fed chief’s comments; ITC slumps

BSE Sensex and NSE Nifty fell on Monday, tracking weaker regional shares as fears about earlier-than-expected U.S. rate hikes weighed on sentiment, while cigarette maker ITC slumped after posting lower-than-expected earnings.

Federal Reserve Chair Janet Yellen indicated on Friday the U.S. central bank was poised to raise interest rates this year if the world’s top economy improved as expected.

Caution also prevailed ahead of gross domestic product growth data due on Friday. Domestic shares have been on a solid path so far this month, recovering from a volatile April amid continued hopes of an economic recovery.

“The worst is behind us, things should improve. The government is continuing with investment acceleration” said G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.

The benchmark BSE index fell 0.84 percent as of 0719 GMT, while the broader NSE index was down 0.74 percent.

Trading was subdued given U.S. and U.K. markets will be closed on Monday for respective holidays.

Among individual movers ITC fell 2.9 percent after India’s largest cigarette maker reported on Friday lower-than-expected earnings as higher taxes on smokes and a government push to discourage tobacco consumption hurt business.

Tata Motors Ltd fell 0.7 percent due to caution ahead of its January-March earnings due on Tuesday, with traders citing uncertainty about the performance of key unit Jaguar Land Rover in China.

Shares of HCL Technologies Ltd however rose 1.8 percent, heading for a sixth consecutive day of gains as traders cited attractive valuations after falls in March and April.

Bombay Stock Exchange - BSE