(Updates closing levels, adds analysts' comments)
By Bharath Rajeswaran
BENGALURU, March 23 (Reuters) - Indian shares settled
lower on Thursday, dragged by information technology stocks and
financials, after the U.S. Federal Reserve reiterated its fight
against inflation with a quarter-point rate hike even as it
signalled that a pause in policy tightening could be near.
After two sessions of gains, the Nifty 50 index closed 0.44% lower at 17,076.90, while the S&P BSE Sensex fell 0.5% to 57,925.28. The benchmarks traded between
0.6% losses and 0.3% gains as investors digested the Fed's
policy decision and comments.
Moreover, U.S. Treasury Secretary Janet Yellen ruled out
"blanket insurance" for all domestic banking deposits, which
could further dent IT firms as they earn a significant share of
their revenue from the United States and Europe.
Eight of the 13 major sectoral indexes declined, with the
heavyweight IT index losing 0.77%. HCLTech ,
Wipro , Infosys were among the top Nifty 50
losers.
"Economic uncertainty and a disproportionate exposure to the
banking, financial services and insurance (BFSI) sector are the
key risks for the IT sector," said Harsha Upadhyaya, president
and chief investment officer for equity at Kotak Mahindra Asset
Management Company.
The drop in Indian equities was in contrast to the surge in
Asian stocks, while U.S. stock index futures also climbed after
having closed sharply lower on Wednesday.
Indian financial stocks also snapped a two-day
winning streak to decline 0.65%.
While domestic lenders are expected to be largely insulated
from the global banking crisis, India has asked state-owned
banks to submit details of their bond portfolios ahead of a
meeting on Saturday, sources told Reuters.
"There won't be major panic as India's banks face no major
structural risks, but sentiment will remain subdued and markets
will remain rangebound," said Avinash Gorakshakar, head of
research at Profitmart Securities.
Vedanta Ltd fell nearly 5% after a media report
said parent Vedanta Resources' Chairman Anil Agarwal is looking
to sell a stake in the company. Vedanta called the report
"baseless and untrue".
Hindustan Aeronautics Ltd lost nearly 5% after the
government proposed to sell a stake of up to 3.5% in the
company.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio
D'Souza)
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