IT, metals drag Sensex, Nifty50 lower amid US Fed’s hawkish stance

• The 30-share BSE Sensex declined 305 points to 62,367 while Nifty50 dipped 87.95 points to 18,572.
• The overall sentiment was negative across markets as the US Federal Reserve signaled that interest rates will rise higher than anticipated next year.
• Out of the Sensex pack, Tech Mahindra, Infosys, HCL Technologies, Tata Consultancy Services, Titan and UltraTech Cement were the major laggards.
• On Wednesday, the US Federal Reserve raised interest rates by 50 basis points to its highest level in 15 years.

Indian benchmark indices were trading lower on Thursday following weak cues from global markets due to the US Federal Reserve's hawkish stance.

The 30-share BSE Sensex declined 348 points to 62,329 while Nifty50 dipped 96.10 points to 18,564, as of 11:49 am, December 15.

Out of the Sensex pack, Tech Mahindra, Infosys, HCL Technologies, Tata Consultancy Services, Titan and UltraTech Cement were the major laggards. IndusInd Bank, State Bank of India, Mahindra & Mahindra and NTPC were among the winners.

Amid other stocks, IRCTC plunged more than 5% after the government announced it will sell a 5% stake in the company through offer for sale (OFS) on Thursday and Friday. Up to 4 crore shares will be on offer with a fixed price of ₹680 per share.

The overall sentiment was negative across markets as the US Fed signaled that interest rates will rise higher than anticipated next year.

On Wednesday, the US Fed raised interest rates by 50 basis points to 4.25-4.5%, its highest level in 15 years. The terminal rate is now projected at 5.1%, up 50 basis points from the projections in September this year.

Asian markets were also trading lower with Hang Seng down 1.30%, Nikkei 225 0.41% lower, Shanghai SE Composite Index was down 0.34% while Taiwan SE Weighted Index 0.04% lower.

The US markets ended lower on Wednesday with S&P 500 down 0.61%. The tech heavy Nasdaq closed 0.76% lower while Dow Jones ended 0.42% down. give % like we usually do

“The world was grappling with high inflation, not seen in the last 40 years. The Fed was late to act, but nevertheless, they did it with four steepest rate hikes of 75 bps each. However, with inflation figures coming in at 7.1%, the Fed Chief has delivered what he promised, a slowdown in rate hikes,” said Apurva Sheth, head of markets perspective & research at Samco Securities.

“The markets have not reacted positively because the Fed has increased its projection of the terminal interest rate from 4.6% to 5.1%,” Sheth added.

International oil benchmark Brent crude declined 0.65% to $82.16 per barrel.

Foreign institutional investors (FIIs) were net buyers on Wednesday as they bought shares worth Rs 372.16 crore, according to exchange data.

“Even though the Fed downshifted the rate hike to 50 basis points as expected, the tone of the commentary was unexpectedly hawkish. Globally, equity markets would be watching out for the ECB (European Central Bank) and BoE (Bank of England) decisions today, which are also likely to be 50 basis point hikes,” said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

(With inputs from PTI)

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