Shares log worst week in six months on Fed rate fears, COVID worries – Reuters

BENGALURU, Dec 23 (Reuters) – Indian shares posted their worst week in six months as robust U.S. economic data revived concerns of higher interest rate hikes, while a surge in COVID-19 infections in China also dampened risk appetite.
India's benchmark Nifty 50 (.NSEI) slipped below the 18,000 mark on Friday and closed down 1.77% at 17,806.80, lowest since Oct. 28.
The S&P BSE Sensex (.BSESN) fell 1.61% to 59,845.29, and closed below 60,000 for the first time since Oct. 28, marking the worst week for the Nifty and Sensex in six months. Both the indexes fell over 2.4% on a weekly basis.
Wall Street fell sharply overnight after a resilient final estimate of third-quarter U.S. gross domestic product and other data fuelled worries that the Federal Reserve would keep hiking interest rates for longer than feared.
Meanwhile, China is expecting a peak in COVID-19 infections within a week, a health official said, with authorities predicting extra strain on the country's health system.
All the Indian sectoral indexes declined.
The pharma index (.NIPHARM) has outperformed the markets this week, rising 1.17%, compared with a 2.53% fall for the Nifty.
However, analysts said it was unlikely there would be a repeat of the pharma rally seen during the previous waves of the pandemic.
"It's unwise to chase pharma stocks just on hopes that they will do very well because COVID-19 is coming back," said Neeraj Dewan, director, Quantum Securities. The "fear of the unknown" is not prevalent anymore, he added.
Metals (.NIFTYMET) fell the most, among major sectors, losing over 4.4% on Friday on COVID-19 concerns in China, the world's largest consumer of steel.
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