Sensex, Nifty Fall on Fed Reserve's Hawkish Stand

Indian benchmark indices have fallen for the third consecutive day as the Fed Reserve maintained its hawkish stance despite holding interest rates unchanged. This caused U.S. bond yields to rally and the dollar to strengthen. Consequently, foreign institutional investors (FIIs) sold heavily in the domestic market.

Weakness in the global market has also affected Indian indices. As a result, the Sensex declined 570.60 points, or 0.85%, to close at 66,230.24, while the Nifty50 dipped 159.05 points, or 0.8%, to close at 19,742.35. Banks, auto, and financial services sectors were hit hardest by the selling.

BSE Midcap and Smallcap indices were down 1% each.

“Bearish sentiment across global equities led to selling in the domestic market for the third straight session as investors fretted over the US Fed statement indicating one more rate hike later this year,” reported Moneycontrol, quoting Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd.

“Other negative catalysts like lingering overseas fund outflows, rising US Dollar index and treasury yields, and higher crude oil prices are making investors jittery.”