The benchmark stock market indices have extended their losing streak for the third consecutive day as market sentiment took a hit from the US Federal Reserve's hawkish stance.
Despite the US Fed's decision to maintain key interest rates at their current levels, the more stringent policy stance has had a negative impact on banking, financial services, and IT stocks.
As of 9:20 am, the Nifty 50 was down by 0.4 per cent, trading at 19,816.45 points, while the S&P BSE Sensex slipped nearly 0.5 percent to reach 66,503.63 points. The broader market indices showed some improvement compared to the previous day but continued to struggle for momentum.
In early trade, most major sectoral indices experienced declines, including Nifty Bank, Nifty Financial Services, and Nifty IT. The Nifty Realty index was the exception, gaining over 1 percent.
Among the top gainers on the Nifty 50 were Hindalco, UPL, Adani Ports, Dr Reddy, and Adani Enterprises. Conversely, the top losers included HCL Tech, ICICI Bank, TCS, LTIM, and Grasim.
Market sentiment in domestic markets has been weak since the benchmark indices reached record highs, primarily due to profit booking and anticipation surrounding the US Federal Reserve's policy decision and stance.
While the US Fed chose to keep interest rates unchanged, it adopted a more stringent monetary policy stance to address inflation concerns.
According to updated quarterly projections from the US central bank, the Fed's benchmark overnight interest rate may still be raised one more time this year, reaching a peak range of 5.50 percent to 5.75 percent.
Deven Mehata, a research analyst at Choice Broking, noted, "The overall market sentiment hinges on Nifty maintaining levels within the range of 19,800 to 19,950. On the upside, an immediate obstacle is anticipated at 20,000, and a breakthrough beyond this level may pave the way for additional gains in the range of 20,100 to 20,200 points."
Given the absence of clear trends in both Nifty and Bank Nifty, Mehata recommended that market participants adopt a prudent, stock-specific approach.
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