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Equity benchmarks retreated for the second session on the trot on Thursday, in lockstep with a bearish trend overseas after the US Federal Reserve increased interest rates by 75 basis points and projected more rate hikes to quell scorching inflation.

The rupee plunging 90 paise to an all-time closing low of 80.96 against the US dollar further weighed on sentiment.

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The hawkish stance by US Fed and anticipated rate increases by other global central banks sparked a sell-off across emerging markets, hitting equities, currencies and other asset classes.

Falling for the second session, the 30-share BSE Sensex declined 337.06 points or 0.57 per cent to close at 59,119.72. During the day, it tanked 624 points or 1.04 per cent to 58,832.78.

On similar lines, the NSE Nifty went lower by 88.55 points or 0.50 per cent to end at 17,629.80.

PowerGrid was the biggest loser in the Sensex pack, dropping 2.80 per cent, followed by HDFC Bank, Axis Bank, HDFC, Bajaj Finserv, ICICI Bank and UltraTech Cement.

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On the other hand, Titan, Hindustan Unilever, Asian Paints, Maruti, ITC and Dr Reddy’s were among the gainers, spurting as much as 2.73 per cent.

“Fed turned more hawkish than anticipated increasing its rate forecast to 4.4 per cent by the end of 2022. The indication is that 125 bps more rate hikes can be expected in the next 2 policy meetings scheduled this year. Following this, the US dollar index rose above 111, depreciating INR to beyond 80.

“Indian stock market was able to sustain its resilience with limited cuts but if the rupee continues its weakness domestic market would turn less attractive for foreign investors in the short-term, effecting performance,” said Vinod Nair, Head of Research at Geojit Financial Services.

Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services, said, “Recessionary fears could keep globally linked sectors like IT, metals and pharma under pressure for some time.” “On the other hand, consumption and crude inputs sectors like FMCG, paints, tyres and autos are likely to benefit from strong domestic demand and fall in commodity prices,” he added.

In the broader market, the BSE smallcap gauge climbed 0.47 per cent and the midcap jumped 0.32 per cent.

Among the BSE sectoral indices, bank dipped 1.44 per cent, followed by financial services (1.22 per cent), energy (0.42 per cent), realty (0.34 per cent), metal (0.32 per cent), oil & gas (0.24 per cent), healthcare (0.22 per cent) and teck (0.12 per cent).

FMCG, consumer discretionary, commodities, auto and industrials were among the gainers.

The US Federal Reserve delivered its third straight 75-bps interest rate hike and forecast rates would reach 4.6 per cent in 2023 from 3 – 3.25 per cent currently. Fed Chair Jerome Powell reiterated the central bank’s commitment to taming inflation.

Elsewhere in Asia, markets in Seoul, Tokyo, Shanghai and Hong Kong ended lower.

European bourses were trading in the red in mid-session deals. Wall Street had ended in the negative territory on Wednesday.

Meanwhile, the international oil benchmark Brent crude climbed 0.55 per cent to USD 90.32 per barrel.

Foreign institutional investors (FIIs) offloaded shares worth a net Rs 461.04 crore on Wednesday after two days of buying, according to data available with the BSE. PTI SUM SUM ABM ABM

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