Closing Bell: Sensex Sheds 139 Points, Nifty Settles At 10,808 Level After US Fed Hikes Interest Rates

The market benchmark S&P BSE Sensex on Thursday fell by 139 points, or 0.39 per cent, to close at 35,600 points, while the broader NSE's Nifty 50 slipped 49 points, or 0.45 per cent, to close at 10,808 points. The market indices snapped a three-session gaining run. The shares fell in tune with Asian peers, as the US Federal Reserve raised US interest rates and struck a hawkish tone in forecasting a slightly faster pace of tightening. Asian shares dropped after the Fed raised its benchmark overnight lending rate to a range of 1.75 percent to 2 percent and forecast two additional hikes by the end of this year, compared to one earlier. The MSCI's broadest index of Asia-Pacific shares outside Japan declined 1.16 percent. In the morning trade, Sensex fell by over 200 points while the Nifty shed over 65 points.

Among sectoral indices, BSE teck index declined by over 1.32 per cent, BSE IT (infotech) index was down by 1.40 per cent and BSE capital goods index fell by 0.81 per cent. Pharma stocks bucked the trend as the NSE's Nifty pharma index rose by 1.83 per cent. 

Top gainers of Sensex included SunPharma (2.57 percent), Dr Reddy (0.73 percent), Yes Bank (1.17 percent), while the top laggards included ICICI Bank (2.11 percent), TCS (1.75 percent) and SBI (1.72 percent). 

The top laggards of Nifty50 included Tech Mahindra (2.16 percent), TCS (2.15 percent) and AdaniPorts (2.15 percent).  

"People are a bit nervous because of the Fed's hawkish tone and since the Fed may increase the pace of tightening. Moreover, there is an overhang from the European Central Bank (ECB) policy as all these central banks are on the reverse course now," said Saurabh Jain, AVP, research, SMC Global Securities.

The ECB at its meeting on Thursday will debate whether to end a massive bond purchase scheme later this year, taking its biggest step yet in dismantling crisis-era stimulus credited with reviving growth after a double-dip recession.

The Nifty IT index fell as much as 1.5 percent and was on track to end a six-session winning streak. Infosys Ltd lost 2.6 percent.

Lenders also fell, with the State Bank of India retreating 1.74 percent. The Nifty PSU bank index lost as much as 1.9 percent, after gaining in the last six sessions.

ICICI Prudential Life Insurance Co Ltd dropped as much as 2.9 percent after ICICI Bank Ltd said it would sell a 2 percent stake in the insurer.

Oberoi Realty Ltd dropped as much as 3.6 percent after the real estate developer said it would offer shares to institutional investors.

Meanwhile, shares of Ruchi Soya Industries Ltd, which has been undergoing an insolvency resolution process since December, climbed 4.7 percent to hit their upper price limit before closing at 4.95 percent higher at Rs 13.37, after the edible oil producer said its committee of lenders declared Adani Wilmar Ltd as top bidder for the company.

(With Reuters inputs)