INDIA STOCKS-Indian shares decline on U.S. recession worries, hawkish Fed

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BENGALURU, Jan 19 (Reuters) – Indian stocks were trading lower on Thursday after two consecutive sessions of gains, as weak U.S. economic data and dovish comments from the U.S. Federal Reserve United burden on sentiment.

The Nifty 50 index was down 0.31% at 18,108.85 as of 10:45 am IST, while the S&P BSE Sensex was down 0.27% at 60,878.62.

“The crucial issue influencing equity markets globally is whether the US will manage to contain inflation without falling into recession,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“When data points to a possible recession, US markets go down and all other markets are hit.”

US data showed retail sales fell by the most in a year in December, while manufacturing output recorded the biggest drop in nearly two years.

Fed policymakers signaled on Wednesday that they will push for more interest rate hikes, even as inflation shows signs of peaking and economic activity is slowing.

In domestic trade, most of the 13 Nifty sectoral indices were in negative territory, with metal stocks among the worst decliners, down over 1%, after two straight sessions of gain.

“Metals benefited on hopes of demand recovery from China, reopening its borders, and now we are seeing some profit booking in the sector,” said Siddhartha Khemka, head of research (trading retail) at Motilal Oswal Financial Services.

Hindustan Unilever Ltd and Asian Paints fell 1% and 0.4% higher, respectively, ahead of their quarterly earnings results later in the day. Investors will look for commentary on the impact of inflation on demand.

Private lender IndusInd Bank rose 1.8% after reporting a bigger-than-expected jump in third-quarter profit on Wednesday. ($1 = 81.4400 Indian rupees) (Reporting by Rama Venkat and Bharath Rajeswaran in Bengaluru; Editing by Nivedita Bhattacharjee)

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