IT stocks drag Indian shares lower ahead of Fed rate decision
By Bharath Rajeswaran
BENGALURU (Reuters) -Indian shares declined on Wednesday, dragged by information technology (IT) stocks, as caution prevailed across markets ahead of the U.S. Federal Reserve's rate decision later in the day.
The Nifty 50 closed 0.32% lower at 18,089.85, while the S&P BSE Sensex lost 0.26% to 61,193.30. The Sensex snapped an eight-day winning streak while the Nifty logged losses after six sessions of gains.
Nine of the 13 major sectoral indexes declined. IT, metals and public sector banks lost about 1% each.
The odds of the Fed hiking rates by 25 basis points were at 87.4% when domestic markets closed, according to the CME FedWatch tool. IT firms earn a significant share of their revenue from the U.S. and Europe and more rate hikes could hurt client spending.
Metals fell, dragged by weak factory activity data from top metals consumer China, while financials trimmed intraday losses to close marginally lower.
Global equities remained subdued ahead of the Fed rate decision, due at 11:30 p.m. IST. [MKTS/GLOB]
"Investors exercised caution on fears that any further rate hike could push key economies into recession and temper growth," said Prashanth Tapse, senior vice president (research) at Mehta Equities.
IndiGo airline operator Interglobe Aviation Ltd jumped nearly 5%, while Wadia group stocks such as Bombay Burmah Ltd and Bombay Dyeing lost between 4% and 6%, after Go First filed for bankruptcy on Tuesday.
Brokerage Credit Suisse said the decision can benefit Interglobe Aviation and lead to a higher market share.
MRF Ltd gained over 5% after reporting a 162% year-on-year rise in March-quarter profit, while Adani Wilmar Ltd lost more than 4% after posting a 60% slide in March-quarter profit.
Upstream oil company Oil and Natural Gas Corporation Ltd fell nearly 2% and was among the top Nifty 50 losers on a sharp fall in crude oil prices.
($1 = 81.7770 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Varun H K and Janane Venkatraman)