Indian shares fall as Fed flags more rate hikes

Thursday,   22-Sep-2022   04:12 PM (IST)

Indian shares ended lower on Thursday, while the rupee closed at a record low, after the U.S. Federal Reserve raised interest rates and indicated it would raise rate more often than markets had expected. The NSE Nifty 50 index fell 0.5% at 17,629.80, while the S&P BSE Sensex dropped 0.57% to 59,119.72. The Indian rupee closed at a record low of 80.86 against the U.S. dollar. The Fed increased rates by 75 basis points on Wednesday to bring down inflation from four-decade highs and Chairman Jerome Powell said the Fed "will keep at it until the job is done." The Indian government, however, is in no hurry to push inflation – hovering near eight-year highs of 7% – back to the central bank's 4% medium-term target, for fear that aggressive rate hikes could hurt economic growth. The Reserve Bank of India is due to meet next week to decide on monetary policy. Although, the Indian government is not averse to a weaker rupee in line with global market fundamentals, a senior official told Reuters. The Nifty bank index dropped 1.4%. The index has gained nearly 22% so far this quarter, to hit a lifetime high last week on expectations of higher credit growth. The Nifty fast moving consumer goods index was the top gainer among all sectors, rising 1.3% to lock in gains of 4.4% for the week. Foreign investors purchased a net $1.4 billion worth of Indian equities so far this month as of last close, compared with a net $6.44 billion worth of equities in August. Among stocks, shares of Fortis Healthcare sank nearly 15% after India's top court, according to media reports, ordered the continuation of a stay on IHH Healthcare's open offer for the company.