Stock Market News: After the U.S. Federal Reserve hinted that interest rates would stay higher for longer, India’s benchmark indices extended falls for the third straight session on Thursday, driven by IT stocks.
After increasing by 2% apiece and reaching record highs the week before, both benchmarks have fallen by around 2% so far this week.
As was largely anticipated, the Fed kept key interest rates constant on Wednesday and raised its economic forecasts while announcing that the fight against inflation was far from done.
The market did not anticipate that the halt would last longer or that interest rates would stay high, according to Ambit Asset Management fund manager Aishvarya Dadheech.
In light of this (Fed) event, he continued, “a broad-based sell-off (in India stocks) can’t be ruled out at these valuations.”
Losses were led by the information technology (IT) index, which fell roughly 1%. Sector heavyweights HCL Tech and Tata Consultancy Services were among the top Nifty benchmark losers, falling 2% and 1.8%, respectively.
The majority of Indian IT businesses receive a sizable portion of their income from the United States.
While small-caps dipped 0.2%, the domestically oriented mid-cap index was trading flat.
“In our view, the intraday market structure is weak, but due to temporary oversold conditions, we may see range-bound activity in the near term,” Shrikant Chouhan, head of research (retail) at Kotak Securities, wrote in a note.
The banking index dropped for the second day in a row, losing 0.5%, with ICICI Bank, India’s second-largest private lender, falling by 2%.
One company that experienced a decline of up to 10% was the state-run SJVN, which generates hydropower. The Indian government said this week that it will sell up to 4.92% of the company.