By Ambar Warrick 

-- India’s bluechip Nifty 50 index was set for a weak open on Thursday, stock futures indicated, after data showed the country’s economy grew less than expected in the April-June quarter. 

Singapore-traded Nifty 50 Futures were down 0.2% at 17,477 points by 21:54 ET (01:54 GMT). Regional markets are also expected to fall in catch-up trade with Wall Street and broader Asia, after a holiday on Wednesday. Global stock markets tumbled on growing fears of more sharp interest rate hikes by the U.S. Federal Reserve. 

Data on Wednesday showed that the Indian economy grew 13.5% in the three months to June 30- its fastest pace of growth in a year. But the reading missed expectations for growth of 15.2%, as well as the central bank’s forecast for growth of 16.2%. 

Gross domestic product (GDP) for the April-June quarter in 2021 was 20.1%, although a bulk of this was driven by a low basis for comparison, due to the COVID-19 pandemic in 2020.  

Private consumption accounted for the largest share of growth through the quarter, at nearly 60%. The reading indicates that consumer spending, which is a major driver of the Indian economy, has been so far been deterred little by rising inflation.

Still, the Indian economy faces continued headwinds from high oil prices, given the country’s large dependence on crude imports. This saw the rupee slump to record lows earlier in the year.

The Indian economy is also grappling with rising unemployment and inflation, two factors that could dent its consumption-driven growth later in the year. 

Rising inflation saw the Reserve Bank of India raise interest rates to pre-pandemic levels- a move that could weigh on growth in the near-term. The bank expects the economy to expand by 7.2% in fiscal 2023. 

Indian stocks have fallen sharply this year, amid headwinds from a global economic slowdown. The technology sector was hit the hardest, as rising interest rates across the globe dented sentiment.