BENGALURU, Dec 15 (Reuters) – Indian shares fell on Thursday, dragged by a slide in information technology stocks after the US Federal Reserve signaled that the interest rate hikes might continue for longer than expected.
The Nifty 50 index (.NSEI) was down 0.37% at 18,592.60, as of 10:30 am IST, and the S&P BSE Sensex (.BSESN) lost 0.38% to 62,434.66.
“Indian markets have sharply reacted to major decisions by US Fed and slide in the Wall Street, in the short term, but there is no cause for concern as the dichotomy between Indian and US markets is rising”, said G Chokkalingam, founder, Equinomics Research & Advisory.
Fed Chair Jerome Powell said that the US central bank will maintain a “restrictive enough” policy stance to control inflation.
US central bankers see the policy rate, now in the 4.25%-4.5% range after Wednesday’s 50-basis-point increase, rising to 5.1% by the end of next year, according to the median estimate in the Fed’s quarterly summary of economic projections published at the end of its two-day meeting.
That is a half percentage point higher than they forecast in September.
Wall Street equities slid overnight after the statement, with all the key indexes logging losses.
Asian markets declined, with the MSCI Asia ex Japan sliding 0.99%. MKTS/GLOB/
Among the major sectoral indexes, Nifty IT (.NIFTYIT) fell the most, shedding over 1%. All ten constituents of the IT index declined.
Equinomics’ Chokkalingam said that it was time to buy select IT firms as the correction would “lead to a substantial contraction in valuations”, making the stocks attractive.
Among individual stocks, Indian Railway Catering and Tourism Corp (INIR.NS) shed 5% after the government said it will sell an up to 5% stake in the company.
($1 = 82.5320 Indian rupees)
Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman and Eileen Soreng
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