Sensex Drops 179 Points, Nifty Ends Below 15,700 on Fed Rate Shock

Sensex tumbled 179 points, while Nifty fell 76.15 points or 0.48 per cent to 15,691.40 on Thursday, weighed down by losses in index heavyweights and a largely negative trend in global equities, even as new coronavirus infection and death numbers kept falling, with active cases down to a 71-day low at 8,26,740, according to a Union health ministry release.

The rupee too continued on its downward journey, sliding 76 paise to close below $74 on Thursday, tracking a strong greenback overseas after the US Federal Reserve surprised the market by signalling a rate hike sooner than expected.

The 30-share BSE index ended 178.65 points or 0.34 per cent lower at 52,323.33, with IndusInd Bank the top loser, shedding around 3 per cent, followed by Dr Reddy’s, NTPC, Maruti, Axis Bank, Bajaj Auto, Bharti Airtel and HDFC. UltraTech Cement, TCS, Asian Paints and Infosys were among the gainers.

“Bulls stepped back a bit following the economic forecast by US Federal Reserve, as the street stayed cautious on slow economic recovery in emerging markets, unlike some developed markets,” said S Ranganathan, head of research at LKP Securities.

The Fed’s policymakers said they would raise their benchmark short-term rate, which influences many consumer and business loans, twice by late 2023. They had previously estimated that no rate hike would occur before 2024.

While metal names saw profit-booking, there was keen buying interest in cement and IT, well-supported by select consumer names during the volatile afternoon session of trade, Ranganathan noted.

Elsewhere in Asia, bourses in Shanghai and Hong Kong ended on a positive note, while Seoul and Tokyo were in the red. Stock exchanges in Europe were also trading with losses in mid-session deals.

Brent crude was trading 0.09 per cent higher at $74.46 per barrel.