Indian shares fell more than 1 per cent to post their biggest loss in three weeks on Thursday, tracking weak global markets as caution prevailed about the possibility of an interest rate hike by the US Federal Reserve as early as June.

The broader NSE index closed down 86.75 points or 1.1 per cent at 7,783.40, posting its biggest percentage loss since April 28, while the benchmark BSE index ended down 304.89 points or 1.19 per cent at 25,399.72.

Among BSE sectoral indices, capital goods index fell the most by 2.38 per cent, infrastructure 2.01 per cent, FMCG 1.74 per cent and metal 1.61 per cent.

Major Sensex losers were Adani Ports (-6.14%), State Bank of India (-4.05%), L&T (-3.24%), GAIL (-2.71%) and HDFC (-2.61%), while the gainers were Lupin (+1.43%), Wipro (+0.7%), Tata Motors (+0.7%), Maruti (+0.32%) and Hero MotoCorp (+0.21%),

Minutes released on Wednesday showed Fed officials said it would be appropriate to raise interest rates in June if economic data points to stronger second-quarter growth as well as firming inflation and employment.

The minutes come a day after comments from Fed officials had appeared to signal potential rate hikes.

Reflecting these concerns, Asian stocks fell while the dollar index hovered just below a seven-week high, boosted by sharply higher US Treasury yields.

A report by SMC Global said: "US stocks finished little changed late Wednesday following a bumpy session after minutes from the Federal Reserve's most recent meeting indicated that “most” of its members are ready to lift rates as early as June.Federal Reserve policymakers see a rate hike coming in June, according to the minutes from the Fed's April policy meeting released. It's the most telling sign yet that the Fed plans to tighten in the near future, as inflation is picking and jobs growth is on the rise."

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