BSE Sensex and NSE Nifty opened lower on Thursday, led by IT stocks, after the Federal Reserve reiterated its fight against inflation even as it signalled it might soon pause interest rate hikes and as the US treasury secretary ruled out insuring all banking deposits.
The Nifty 50 index was down 0.39 per cent at 17,082, while the S&P BSE Sensex fell 0.45 per cent to 57,948.52 in early trade. The broader Asian equity indexes were subdued.
Eight of the 13 major sectoral indexes declined with high weightage financials and information technology (IT) stocks losing 0.5 per cent and 1 per cent, respectively. All 10 constituents of the IT index logged losses.
IT companies, which earn a significant share of their revenue from the US and Europe, could be pressured by the uncertain banking sector outlook and an overall slowdown in client spending due to higher rates, analysts said.
Wall Street equities initially rose after the Fed raised rates by 25 basis points, as expected. The indexes then reversed course to end sharply lower after US Treasury Secretary Janet Yellen said the government is not considering 'blanket insurance' for all banking deposits, dashing hopes of a quick guarantee to stem the banking crisis.
Among individual stocks, Hero MotoCorp rose over 1 per cent and was the top Nifty 50 gainer after the company announced a price hike in select two-wheeler models from April 1.
Hindustan Aeronautics lost nearly 6 per cent after the government proposed to sell a stake of up to 3.5 per cent in the company.