Indian Stock Markets Decline Amid Fed's Rate Hike Signals

21 Sep 2023 , 02:07 PM

India’s benchmark indexes declined for the third consecutive day on Thursday, mainly due to IT stocks. This decline is a reaction to the U.S. Federal Reserve indicating that interest rates might stay higher for a longer time.

Both benchmark indexes have fallen about 2% this week, after a 2% gain and reaching record highs the previous week. At the time of writing Sensex was trading at Rs 66200 (-0.90%), and Nifty was trading at Rs 19,739.70 (-0.82%).

The Fed decided to keep key interest rates steady and raised economic projections while expressing concerns about ongoing inflation. The IT sector suffered the most, dropping about 1%, with major companies like HCL Tech and Tata Consultancy Services being the top losers. Indian IT companies rely heavily on revenues from the United States.

Mid-cap index remained steady, but small-cap stocks fell by 0.2%. The banking index also dropped for the second consecutive day, with ICICI Bank, India’s second-largest private lender, falling by 2%.

SJVN, a state-run hydropower generation company, experienced a significant drop of 10% following the Indian government’s announcement of selling a 4.92% stake in the company this week.

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