Shares opened marginally down on Thursday, dragged by declines in tech and auto stocks, amid fears that the strong U.S. retail sales data could push the Federal Reserve to sustain its aggressive rate hike stance.
The S&P BSE Sensex slipped 0.17% to 61,876.93, as of 0346 GMT, after closing at an all-time high for the second straight session on Wednesday. The NSE Nifty 50 index edged 0.21% lower to 18,371.55.
Among the laggards were Nifty's IT, auto and public sector bank indexes, which declined 0.2% to 0.7%.
One 97 Communications slid 9% as a term sheet reviewed by Reuters showed SoftBank Group aims to sell an up to $215 million stake in the Paytm parent. Tata Motors fell 2.4% as it said its top boss at Jaguar Land Rover unit, Thierry Bollore, will resign due to personal reasons.
The MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.47% as stronger-than-expected retail sales data renewed expectations that the Fed will keep hiking rates and fuelled concerns about the economic outlook. [MKTS/GLOB]
Softer-than-expected U.S. inflation data last week gave investors some solace that the Fed could curb its aggressive interest rate hikes, but the stronger October U.S. retail sales could dash those hopes.
Underscoring the Fed's hawkish stance, San Francisco Fed President Mary Daly told CNBC on Wednesday pausing rate hikes is not yet part of the discussion.
"The U.S. Fed indicating that the rate hike situation may not stop soon could trigger bouts of volatility," said Prashanth Tapse, vice president of research at Mehta Equities.
Crude oil declined further in Asia after settling more than a dollar lower overnight as Russian oil shipments via the Druzhba pipeline to Hungary restarted. [O/R]
Separately, on Thursday, R Systems International jumped 20% as Blackstone said it would buy a 52% stake in the IT services provider for $359 million.
Foreign institutional investors on Wednesday continued to sell stock in a second straight session, according to provisional data available with the National Stock Exchange.