Indian stocks edged lower on Friday, dragged down by declines in IT and financial sectors, as investor concerns persisted over the Federal Reserve’s forecast of fewer interest rate cuts next year, prompting a wave of foreign fund outflows. The BSE Sensex closed 1,176 points lower at 78,041.59, and the NSE Nifty slipped 1.52 per cent to close at 23,587.50
Both indices have lost more than 3% this week, marking their first weekly decline in five weeks.
From the 30 blue-chip stocks, Axis Bank, Tech Mahindra, IndusInd Bank, JSW Steel, ITC, Larsen & Toubro, UltraTech Cement and HDFC Bank were the biggest laggards.
Titan, NTPC, Bajaj Finance, Bharti Airtel, Tata Consultancy Services and Maruti were among the gainers.
This week, the Federal Reserve implemented a 0.25% rate cut but projected only two reductions in 2025 – half of what was initially expected – dampening foreign investors’ enthusiasm for Indian stocks.
Fed rate announcement hits stock markets
Domestic IT firms, which generate a significant portion of their revenue from the US and are sensitive to US interest rates, saw a 0.2% dip, reversing earlier gains following Accenture’s better-than-expected quarterly results.
“Although Accenture’s positive earnings gave an initial lift to tech stocks, the Fed’s hawkish rate cut outlook has dampened sentiment, and foreign investment inflows remain negative,” said Anita Gandhi, founder and head of institutional sales at Arihant Capital Markets.
Meanwhile, pharmaceutical stocks, which rely heavily on exports, rose by 0.3%, poised for a weekly gain of 3%.
The rupee dropped to a historic low of 85.10 on Friday due to continued strength in the dollar, which is making Indian exports, including drugs, more affordable to foreign markets.
Among individual stocks, battery manufacturer Amara Raja saw a rise of up to 5% after Hyundai Motor India announced it would use the company’s absorbent glass mat battery technology in its domestic vehicles.