US interest rate hike fears drag Sensex 93 points down to 2-week low

The benchmark Sensex today closed 93 points down at its lowest level in two weeks on selling in banking, capital goods and power shares in line with weakness in global markets rattled by fears that the US Fed may hike interest rates sooner-than-expected.

The Sensex, which had gained 58.25 points in the previous three sessions, fell by 92.77 points, or 0.42 %to 21,740.09 -- the weakest closing since 21,513.87 on March 6. Intra-day, it touched a low of 21,704.66 and a high of 21,853.25. In the 30-share BSE index, 22 stocks led by HDFC and L&T closed in the red.

Aided by value-buying after recent weakness, TCS and Infosys led the eight Sensex gainers today. The 50-share NSE benchmark Nifty fell 40.95 points, or 0.63%, to end at 6,483.10. US Federal Reserve chair Janet Yellen's comments after the Fed's first policy meeting sent ripples through global markets.

At a press conference last night, reports said, Yellen implied Fed's time-frame for raising rates was closer to first half of 2015, sooner than expectations. The Fed also voted to cut its monthly bond purchases from USD 65 billion to USD 55 billion. In Asia, all major equity indices were sharply down. Prominent European indices were trading about one per cent lower each in early trades.

Brokers also indicated Indian market participants sold shares in banking and other interest-sensitive sectors ahead of the RBI's policy meeting on April 1. The rupee also weakened to 61.4 levels against dollar. "Post US Federal Reserve statement indicating that further tapering of monetary stimulus package shall continue and interest rates may also be increased in near future, market sentiment was poor...

Metal stocks were also showing weakness on concerns over slowing demand in China," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio. Bucking the general trend, Tata Consultancy Services, Infosys and Wipro rose. TCS had led the fall in IT pack stocks yesterday on revenue growth concerns.

The BSE-IT index today gained 1.69 per cent. Among laggards, the BSE Realty sector index suffered the most by losing 2.23%, followed by Capital Goods index (down 1.94%), Power index (down 1.62%) and Banking index (down 1.36%).