(Reuters) – Indian shares edged lower on Wednesday as investors traded with caution after the International Monetary Fund (IMF) lowered global economic growth outlook.

A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai, December 11, 2018. REUTERS/Francis Mascarenhas/File Photo

On Tuesday, the IMF reduced its global economic growth outlook by 0.2 percentage points to 3.3 percent, citing the U.S.-China trade war and a potential disorderly British exit from the European Union as key risks.

It also warned of high chances of further cuts to the outlook.

Losses in financials also weighed on the main board.

Asian shares slipped on the IMF downgrade, while the U.S. President Donald Trump’s threat to impose tariffs on $11 billion worth of European Union products added to investor woes.

“While India maybe among the fastest-growing economies of the world, a slowdown in global growth would definitely hurt (the markets) along with factors like higher crude prices,” said Siddhartha Khemka, head of retail research at Motilal Oswal Securities.

“Strong FII inflows over the last couple of months, which lifted domestic markets, could reduce and we could also see profit-booking.”

The broader NSE Nifty was down 0.18 percent at 11,651.45 as of 0633 GMT, while the benchmark BSE Sensex was 0.20 percent lower at 38,859.83.

Cautious sentiment prevailed ahead of March-quarter earnings beginning later this week. Research firms Nomura and Jefferies forecast a weak quarter for Indian auto and oil and gas companies, citing weak volume growth and refining/petchem margins.

Nomura is optimistic on the pharmaceutical sector, saying prescription volumes have increased for most companies year-on-year as they gained market share. The index was up 0.7 percent.

Among financials, index heavyweight HDFC Bank Ltd lead the decline. The private-sector lender was down 1.3 percent.

Aluminium producer Hindalco Industries Ltd fell to its lowest in over a month after reporting a spillage at its Jharkhand plant. Stock fell as much as 3.45 percent.

Among gainers, Reliance Industries Ltd and Oil and Natural Gas Corp Ltd rose over 1 percent each, taking the energy index 0.2 percent higher.

Reporting By Arnab Paul in Bengaluru; Editing by Uttaresh.V


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