Indian Stocks Drop for First Time in Four Days on Hawkish Fed
(Bloomberg) -- Indian equities fell for the first time in four days after the U.S. Federal Reserve raised borrowing costs and struck a hawkish tone in its latest policy statement.
The benchmark S&P BSE Sensex declined 0.4 percent to 35,599.82 at the close in Mumbai, while the NSE Nifty 50 dropped 0.5 percent. Software exporters and commodity producers retreated, with Wipro Ltd., Tata Consultancy Services Ltd. and ICICI Bank Ltd. among the top losers on both gauges.
Sun Pharmaceutical Industries Ltd. extended a rally after U.S. regulators lifted sanctions on a key facility. As many as 15 of 19 sub-gauges compiled by BSE Ltd. declined, with the S&P BSE Information Technology Index dropping 1.4 percent and the S&P BSE Consumer Durables Index falling 0.9 percent.
“While the market had anticipated the Fed move, the surprise came in the more hawkish projections and language used by the members of the FOMC,” Sageraj Bariya, vice president of institutional sales at East India Securities, said by email. “With the ECB meeting later in the day, traders are happy to book profit knowing that they are probably in for the usual topsy-turvy session.”
Federal Open Market Committee Chairman Jerome Powell told reporters that as unemployment and inflation are both low, raising rates too slowly or quickly could be harmful. The gap between policy rates in India and the U.S. remains wide -- giving some room for the RBI to stand pat even as the Fed tightens.
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