Sensex, Nifty50 fall over 1% as US Fed commentary disappoints

• The 30-scrip Sensex ended 878 points lower at 61,799 while the 50-stock Nifty50 closed 245 points down at 18,414.9.
• All the Nifty sectoral indices closed the day in the red.
• Leading the fall was the IT index, which fell 2.11%, followed by media and PSU bank indices, which fell 2.08% and 1.88% respectively.

Indian benchmark indices Sensex and the Nifty tumbled on Thursday tracking a battering in global markets on concerns the US Federal Reserve’s rate hikes would continue for longer than expected. IT, bank and metal stocks led the over 1% decline on both the indices – the largest single-day fall since November 10.

On Wednesday, the US Fed effected a 50-basis point rate hike and indicated that it would continue with rate hikes to rein in inflation.

All the sectoral indices on the NSE closed the day in the red. Leading the fall was the IT index, which fell 2.11%, followed by the media and PSU bank indices, which fell 2.08% and 1.88% respectively.

The 30-scrip Sensex ended 879 points, or 1.4%, down at 61,799 while the 50-stock index Nifty50 closed 245 points, or 1.32%, down at 18,414.9.

“IT stocks came under selling pressure following weakness in Nasdaq and hints by the US Fed that the rate hike cycle is not going to end soon. Cyclical sectors like metals and realty also came under selling pressure,” said Deepak Jasani, head of retail research at HDFC Securities.

Amongst the Nifty50 stocks, Tech Mahindra (-3.81%), Titan (-2.72%), Infosys (-2.5%), Grasim Industries (-2.35%), and Eicher Motors (-2.09%) were the top five losers.

Asian markets bleed on US Fed stance

The US Fed’s hawkish stance and indications that the rate hikes would continue into the new year led to a steep fall in equity markets around the world. Asian markets were all in the red on Thursday.

Hang Seng was the biggest loser with a 1.5% fall, followed by the Nikkei 225 that saw a 0.37% decline. Shanghai SE Composite was down 0.25% and Taiwan SE Weighted dipped 0.04%.

Although the US Fed’s rate hike was along mostly expected lines, it was the hawkish commentary that drove the markets down.

“The US Fed effect led to a massive sell-off in the markets as banking, IT, metal & realty stocks received severe pounding at the hands of investors. Markets were disappointed after the Fed indicated that the rate hike regime would continue next year,” said Shrikant Chouhan, head of equity research (retail), Kotak Securities.

Thanks to the weak market momentum, 2,152 stocks closed the day in the red on the BSE while 1,407 stocks gained.

Brent crude oil prices fell 0.21% to $82.53 on US Fed’s hawkish commentary, snapping a three-day rally in the run-up to the rate hike announcement.

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