Indian shares cut losses as focus shifts to Fed's US growth outlook

BENGALURU: Indian shares trimmed losses on Thursday, as investors focused more on the US Federal Reserve raising the country's economic growth forecast while noting its projection to hike interest rates sooner than expected.

By 0500 GMT, the blue-chip NSE Nifty 50 index was down 0.19% at 15,737.90 after falling as much as 0.78%. The benchmark S&P BSE Sensex traded 0.17% lower at 52,411.71, retreating from its 0.77% fall.

India's benchmark 10-year bond yield rose to up to 6.06% versus Wednesday's close of 6.05%, while the rupee slipped 0.64% to 73.79 against the dollar, its weakest level since early May.

"The market initially reacted to the Fed outcome as it turned slightly hawkish. I would say that the market should not get too worried, as of now, as the growth outlook has also been increased," said Neeraj Dewan, director at Quantum Securities.

The Fed raised the US growth forecast to 7% this year, while officials moved their first projected rate increases from 2024 into 2023 and opened talks about when to pull back on the $120 billion in monthly bond purchase.

In Mumbai trading, financials stocks weighed on the Nifty 50, with HDFC Bank Ltd, HDFC Ltd and ICICI Bank Ltd shedding between 0.6% and 0.9%.

The Nifty Bank Index and the Nifty Private Bank Index, which have so far fallen over 0.50% this week, lost 0.47% each.

Adani Group stocks extended their decline for a fourth straight day, even after its companies earlier this week rejected a media report that said accounts of three foreign investor funds that own the Group's stocks were frozen.

Adani Transmission, Adani Green Energy Adani Total Gas Adani Power fell 5% each to be locked in lower circuits. Adani Ports and Special Economic Zone Ltd was among the top drags on the Nifty 50, dropping 2.4%.