INDIA STOCKS-Indian shares slip ahead of third-quarter earnings on rate worries

BENGALURU, Jan 6 (Reuters) - Indian shares edged lower

on Friday, after strong U.S. data indicated the Federal Reserve

would have to keep hiking interest rates. The Nifty 50 index was down 0.26% at 17,944.95 as of

10:30 a.m. IST, while the S&P BSE Sensex fell 0.30% to

60,164.87. Both the indexes had risen 0.3% during the session. Most of the major sectoral indexes logged losses.

Twenty-five of the Nifty 50 constituents fell, with information

technology stocks declining ahead of the third

quarter earnings season, set to begin on Monday. "The nervousness in the markets over the last few sessions

is due to muted earnings expectations, like the kind we saw with

Bajaj Finance and FMCG companies," said Aishvarya Dadheech,

director and fund manager at Ambit Asset Management. "Fund flows, including from domestic mutual funds have not

been very encouraging, over the last few months," he added. Wall Street equities closed lower overnight after data

showed private employers hired more workers than expected in

December, suggesting strength in the labour market. The

resilience could allow the Fed to boost its target interest rate

above the 5.1% peak projected earlier. Asian markets shrugged off rate worries on Friday, with the

MSCI Asia ex Japan rising 0.74%. Global macro data and commentary on the Fed's rate hike

trajectory would add to market volatility in the near term, said

analysts. Adding to losses in Indian equities was the rebound in oil

prices, which rose over 1% on lower fuel inventories in the

U.S. Higher oil prices are a negative for oil-importing countries

like India, where crude constitutes the bulk of the country's

import bill. Among individual stocks, index heavyweight Reliance

Industries rose over 1%, capping losses in the

markets. Sobha rose over 2% after the real estate firm

posted its best-ever sales in the third quarter, according to

its business update.

($1 = 82.5680 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by

Janane Venkatraman)