INDIA STOCKS-Indian shares slide to over three-month lows as tepid earnings, global trade risks rattle investors

By Vivek Kumar M

Jan 20 (Reuters) - Indian shares fell to their lowest levels in over three months in a broad-based sell-off, led by IT shares and Reliance Industries, as tepid corporate earnings, global trade worries and unabated foreign fund outflows rattled investors.

The Nifty 50 .NSEI dropped 1.38% to 25,232.5, and the BSE Sensex .BSESN fell 1.28% to 82,180.47, their lowest closing levels in more than three months.

The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 slumped 2.9% and 2.6% to close at their lowest levels in eight months and three months, respectively.

Valuations are being reset, said Dharmesh Kant, head of equity research at Cholamandalam Securities. "While there have been outliers, most of the Nifty 50 companies that have reported December-quarter earnings have disappointed."

All 16 major sectors tumbled on the day, with market breadth turning sharply negative. Only 28 of the Nifty 500 .NIFTY500 stocks managed to close higher.

Heavyweights Reliance Industries RELI.NS and ICICI Bank ICBK.NS reported third-quarter earnings below estimates over the weekend. Reliance dropped 1.4% on the day, extending Monday's fall.

IT companies that have reported numbers so far have largely taken a hit to their bottomline due to India's new labour codes. The index .NIFTYIT slid 2.1% and was the top loser among major sectors.

LTIMindtree LTIM.NS lost 6.7% on quarterly profit fall, while Wipro WIPR.NS dropped 2.5% to extend Monday's slump on weak fourth-quarter outlook.

Overall investor sentiment remained bleak due to U.S. President Donald Trump's threat of more tariffs on eight European Union members. MKTS/GLOB

Continued selling by foreign investors and a lack of broad-based rally ahead of India's federal budget on February 1 also weighed, said Aamar Deo Singh, senior vice president at Angel One.

Foreign investors offloaded Indian shares worth $3 billion in January, marking the biggest monthly sales since August. The Nifty 50 has closed lower in nine out of 13 sessions in January so far.

JK Cement JKCE.NS and Hindustan Zinc HZNC.NS jumped 1.8% and 3.1%, respectively, on the day, after quarterly earnings.

Ola Electric Mobility OLAE.NS fell 8.9% after its finance chief resigned.