Indian equities fell for the first time in four days after the US Federal Reserve raised borrowing costs and struck a hawkish tone in its latest policy statement.
The benchmark S&P BSE Sensex declined 120.33 points or 0.34% to trade ar 35,618.83 at 2.58 pm, while the NSE Nifty 50 also lost 0.42% or 45.65 points to trade at 10,811.05. Software exporters and commodity producers retreated, with Wipro Ltd., NTPC Ltd. and Tata Consultancy Services Ltd. among the top losers on both gauges.
Sun Pharmaceutical Industries Ltd. extended a rally after US regulators lifted sanctions on a key facility. Bharti Airtel Ltd. and Dr. Reddy’s Laboratories Ltd. were the other top gainers on the gauge. As many as 12 of 19 sub-gauges compiled by BSE Ltd. declined, with the S&P BSE Information Technology Index dropping 0.8% while the S&P BSE Healthcare Index added 0.4%.
“While the market had anticipated the Fed move, the surprise came in the more hawkish projections and language used by the members of the FOMC,” Sageraj Bariya, vice president of institutional sales at East India Securities, said by email. “With the ECB meeting later in the day, traders are happy to book profit knowing that they are probably in for the usual topsy-turvy session.”
Federal Open Market Committee (FOMC) Chairman Jerome Powell told reporters that as unemployment and inflation are both low, raising rates too slowly or quickly could be harmful. The gap between policy rates in India and the U.S. remains wide — giving some room for the RBI to stand pat even as the Fed tightens.