BENGALURU: Indian shares are expected to drop at the open on Thursday, in line with Asian peers, after the US Federal Reserve raised interest rates and forecast more hikes than markets had expected.

The Fed increased rates by 75 basis points on Wednesday – the third such rise in a row – and signalled that it would continue to raise borrowing costs to fight inflation.

India’s NSE stock futures listed on the Singapore exchange were down 0.8% as of 0212 GMT, while MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.4%.

The NSE Nifty 50 index ended 0.55% lower at 17,718.35 on Wednesday, while the S&P BSE Sensex slipped 0.44% to 59,456.78.

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India’s central bank is due to meet next week to decide on its own path for monetary policy.

The government is in no hurry to push inflation – now hovering near 7% and eight-year highs – back to the central bank’s 4% medium-term target, for fear that aggressive rate hikes could hurt economic growth, two sources with direct knowledge of the matter said.