The slide in the IT sector, which earns a significant share of its revenue from the United States, comes after Powell's testimony before the U.S. Congress on Tuesday, in which he said strong economic data raised the possibility of prolonged and higher-than-expected interest rate hikes. "Whatever respite Indian markets had over the last two sessions is over after Powell's hawkish commentary," said Anita Gandhi, director at Arihant Capital Markets.
Global markets fell after his comments, with the MSCI's broadest index of Asia-Pacific shares outside Japan losing 1.82%. The probability of a 50 basis point increase in the federal funds target rate at the March meeting has now risen above 70%. The semi-annual, two-day monetary policy testimony will continue on Wednesday.
Thirty-one of the Nifty 50 constituents logged losses with Hindalco and IT stocks falling the most. Most of the Adani group stocks, however, extended gains after U.S. boutique investment firm GQG Partners' $1.87 billion investment in the conglomerate on Thursday.
"Foreign investors turning buyers in Indian equities over the last three sessions and the easing of concerns over Adani group are the only silver-linings for our markets," Arihant Capital's Gandhi said.
The group's flagship Adani Enterprises added over
3% and was the top Nifty 50 gainer.
Gail India advanced nearly 3.5% after the company
announced it will consider an interim dividend for FY2023 in its
board meeting on March 13.
($1 = 82.2100 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by
Janane Venkatraman and Dhanya Ann Thoppil)
