IT, financials lead Indian shares lower after Fed rate hike

Thursday,   23-Mar-2023   03:49 PM (IST)

Indian shares settled lower on Thursday, dragged by information technology stocks and financials, after the U.S. Federal Reserve reiterated its fight against inflation with a quarter-point rate hike even as it signalled that a pause in policy tightening could be near. After two sessions of gains, the Nifty 50 index closed 0.44% lower at 17,076.90, while the S&P BSE Sensex fell 0.5% to 57,925.28. The benchmarks traded between 0.6% losses and 0.3% gains as investors digested the Fed's policy decision and comments. Moreover, U.S. Treasury Secretary Janet Yellen ruled out "blanket insurance" for all domestic banking deposits, which could further dent IT firms as they earn a significant share of their revenue from the United States and Europe. Eight of the 13 major sectoral indexes declined, with the heavyweight IT index losing 0.77%. HCLTech, Wipro, Infosys were among the top Nifty 50 losers. The drop in Indian equities was in contrast to the surge in Asian stocks, while U.S. stock index futures also climbed after having closed sharply lower on Wednesday. Indian financial stocks also snapped a two-day winning streak to decline 0.65%. While domestic lenders are expected to be largely insulated from the global banking crisis, India has asked state-owned banks to submit details of their bond portfolios ahead of a meeting on Saturday, sources told Reuters. Vedanta Ltd fell nearly 5% after a media report said parent Vedanta Resources' Chairman Anil Agarwal is looking to sell a stake in the company. Vedanta called the report "baseless and untrue". Hindustan Aeronautics Ltd lost nearly 5% after the government proposed to sell a stake of up to 3.5% in the company.