Sensex snaps 3-day gaining streak as Fed raises rate, ends 139 points lower

The Sensex and Nifty snapped a three-session winning streak to end lower on Thursday, tracking Asian peers, a day after the US Federal Reserve raised interest rates and struck a more hawkish tone in forecasting a slightly faster pace of tightening. The Fed raised its benchmark overnight lending rate by a quarter of a percentage point to a range of 1.75 per cent to 2 per cent and forecast two additional hikes by the end of this year, compared with one previously.

The Sensex ended at 35,599, down 139.34 points, while Nifty closed at 10,808, down 48.65 points. In the broader market, the BSE Midcap and the BSE Smallcap indices remained little changed.

Market breadth indicating the overall health of the market turned negative. On the BSE, 1,393 stocks declined, 1,232 stocks rallied, while 134 stocks remained unchanged. 

"The flurry of central bank meetings has kept global markets on the backfoot, dragging Indian markets lower earlier in the day. WPI rising to a 14 month high and a widening CAD, both largely on account of rising crude, also kept sentiments low, but sectoral cues continued to keep markets optimistic, with pharma bucking the trend and rising nearly 2 percent," said Anand James, Chief Market Strategist, Geojit Financial Services.

The Nifty IT index ended 1.5 per cent lower, after marking six sessions of gains. The index was pulled down by Infosys, which closed 2 per cent lower. 

The top gainers on the Sensex were Sun Pharma, Yes Bank, IndusInd Bank, Dr Reddy`s Lab and Reliance Industries whereas ICICI Bank, Tata Consultancy Services (TCS), Adani Ports, State Bank of India (SBI) and Axis Bank were the major losers.

On the Nifty, Lupin, Sun Pharma and HCL Technologies were the highest gainers while Tech Mahindra, Adani Ports and TCS lost the most.

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Investors are also awaiting European Central Bank's policy rate decision. On Friday, Bank of Japan will announce its policy decision.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 70.77 crore, while domestic institutional investors (DIIs) bought equities to the tune of Rs 486.78 crore yesterday, as per provisional data.