MUMBAI: Benchmark indices Sensex and Nifty fell in early trade on Thursday as the Federal Reserve signaled smaller interest rate cuts next year and weakened global market trends.
The 30-share benchmark index Sensex on the Bombay Stock Exchange (BSE) fell 1,162.12 points to 79,020.08 points in early trade. The NSE Nifty index fell 328.55 points to 23,870.30 points.
All 30 blue-chip stocks fell. Infosys, State Bank of India, Tata Steel, Asian Paints, JSW Steel, Bajaj Finserv, Bajaj Finance and Mahindra & Mahindra were the biggest laggards.
In Asian markets, stocks were lower in Seoul, Tokyo, Shanghai and Hong Kong.
Wall Street ended sharply lower on Wednesday.
“When valuations are higher, the market only needs one trigger to pull back sharply. That trigger is the Fed’s guidance for fewer rate cuts in 2025, which goes against market expectations. Although a 25 basis point rate cut is in line with market expectations, However, signs of just two rate cuts of 25 basis points each in 2025, compared to the three or even four rate cuts expected by the market, spooked markets, leading to a sharp sell-off on Wall Street.
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said: “The fact that the Fed Chairman’s comments on the economy and labor market are positive indicates that the US economy is resilient. But when reality is lower than expected, the market always panics .” , explain.
Foreign institutional investors (FIIs) sold shares worth Rs 1,316.81 crore on Wednesday, according to exchange data.
Prashanth Tapse, senior vice president (research) at Mehta, said: “The Fed will cut the benchmark interest rate by 25 basis points, which is the third consecutive rate cut this year, but with the Fed lowering its forecast for 2025 to just two rate cuts, Bullish sentiment weakened,” Equities Ltd. said.
Global oil benchmark Brent crude fell 0.40% to $73.10 a barrel.
The Bombay Stock Exchange’s benchmark index Sensex fell 502.25 points, or 0.62%, to end at 80,182.20 points, falling for the third consecutive day on Wednesday. The Nifty index fell 137.15 points, or 0.56%, to 24,198.85 points.