As the US Federal Reserve left the benchmark interest rates unchanged and indicated it to remain higher for longer, Indian equity indices tumbled for the third consecutive session on Thursday.
The BSE Sensex was trading 557 points or 0.84% lower at 66,242. Nifty50 was trading at 19,740, down 160 points or 0.81%.
The US Federal Reserve announced its interest rate decision after a two-day FOMC meeting and left the benchmark interest rates unchanged at 5.25% – 5.50%.
In the Sensex pack, barring Tech Mahindra and SBI, all other stocks traded with cuts. ICICI Bank, HCL Tech, TCS, Bajaj Finserv and Wipro were the top losers.
Among individual stocks, Apollo Tyres fell 3% after Bias and OTR tyres production at the company’s manufacturing facility in Limda, Gujarat has been stopped due to certain concerns amongst shop floor employees relating to the renewal of long-term settlement agreement.
Sector-wise, Nifty IT declined 0.87%, and Nifty Financial Services fell 0.43%. Whereas media, metal, pharma, PSU bank, and realty sectors opened with gains. Meanwhile, Nifty Midcap100 gained 0.19%, and Smallcap100 surged 0.18%.
Expert Take
“Even though the ‘hawkish pause’ from the Fed was on expected lines, the US markets reacted negatively since the indication from the Fed is that rates will remain ‘higher for longer’. For Nifty the biggest drag will be more FII selling in response to the rising dollar and US bond yields,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Domestic consumption stories like automobiles, hotels and real estate are on a strong wicket and the capital goods segment has been witnessing buying in recent weeks even when FIIs were sellers in the market, Vikayakumar said.
Global Markets
Asian stocks followed Wall Street’s lead on Thursday, dipping across the board as investors interpreted the US Federal Reserve’s latest policy statements as signalling higher-for-longer interest rates.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.6%, with the Hong Kong benchmark shedding 0.1.5%. Japan’s Nikkei fell 1.2%.
Major US stock indices fell. US stock futures, the S&P 500 e-minis, were down 0.12% in early Asia time.
FII/DII Tracker
Foreign investors sold Rs 3,111 crore on a net basis on Wednesday, while their domestic counterparts sold Rs 573 crore, according to stock exchange data.
Oil Prices Fall
Oil prices fell in early Asian trade on Thursday after falling by the most in a month in the previous session on US interest rate hike expectations, and ahead of a steer from other central banks on their rate outlooks.
Brent futures for November delivery fell 44 cents, or 0.5%, to $89.18 a barrel. US West Texas Intermediate crude (WTI) fell 49 cents, or 0.6%, to $89.17.
Rupee Weaknes
The Indian rupee fell 5 paise to $83.16 against the US dollar in early trade. The US dollar index, which measures the curreency against a basket of rivals, was 0.23% higher at 105.56.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
