Sensex, Nifty cautious as IT stocks slide after Hawkish US Fed commentary

The cautious opening followed a weak overnight session on Wall Street, where all three major US indices ended around 1% lower, with the Nasdaq declining 1.3%.

Equity benchmarks traded marginally flat in early deals on Thursday, snapping their four-session gaining streak as a hawkish message from the US Federal Reserve weighed on investor sentiment, particularly in information technology stocks.The Nifty IT index declined over 1.5 per cent, reversing gains from the previous session, after the Fed kept interest rates unchanged but signalled the possibility of a rate hike later this year. The sector, which derives a significant portion of its revenue from the US market, came under pressure amid concerns that higher-for-longer rates could dampen technology spending.At 9.46 am, Sensex traded 82.30 points or 0.11 per cent positive at 77,237.92 after opening flat at 77,131.66. Nifty 50 inched up 35.60 points or 0.15 per cent to 24,121.30 after opening at 24,073.80.The cautious opening followed a weak overnight session on Wall Street, where all three major US indices ended around 1 per cent lower, with the Nasdaq declining 1.3 per cent. Investor sentiment was hit after the Federal Reserve maintained status quo on rates but adopted a hawkish tone on inflation and future policy action. Tech majors Microsoft, Meta Platforms, Alphabet and Amazon ended in red.Asian indices are trading mixed on Thursday.“The hawkish message sent by the new chief of the Fed, Kevin Warsh, was a bit unexpected since Warsh has been in favour of rate cuts and that was what President Trump wanted. But the persistently high inflation in the US left the FOMC with no choice but to send a hawkish message. The dot plot indicates a rate hike, possibly in October,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments.Among sectoral indices, IT emerged as the biggest laggard, shedding more than 1.5 per cent. Infosys, HCLTech and Tech Mahindra were among the top losers on the Nifty 50. Market participants assessed the impact of a potentially tighter US monetary environment on demand outlook for technology services exporters.Lower crude prices cushion downsideDespite weakness in IT counters, broader market sentiment remained relatively resilient as crude oil prices continued to soften.Brent crude declined after the US and Iran reportedly moved closer to a peace agreement, raising hopes of increased oil supplies and a potential easing of sanctions on Iran.According to Vijayakumar, the Indian market is unlikely to be significantly impacted by the Fed’s policy outlook. “In the near term, the market will remain resilient, supported by the crash in Brent crude. FII selling has tapered off as expected, and yesterday FIIs turned buyers, though in limited quantity. Brent crude prices at around $78 level and stability in the rupee are big positives from the market perspective. Bank Nifty will remain strong with upward bias,” he said.The broader market continued to outperform frontline indices. The Nifty Midcap 100 advanced 0.16 per cent, while the Nifty Smallcap index gained 0.32 per cent. The India VIX declined more than 1 per cent to 13.04, indicating reduced market volatility.Most sectoral indices traded in positive territory, with metal, pharma and chemicals posting modest gains.IT stocks lead losses as US Fed signals tougher stanceAmong Nifty 50 constituents, Adani Enterprises, Cipla, TMPV and Trent led the gainers, while Infosys, HCLTech, Tech Mahindra and Bajaj Finance were among the major laggards.Market breadth remained positive, with 2,038 stocks advancing against 1,017 declines on the BSE. As many as 94 stocks touched their 52-week highs, while 15 hit 52-week lows.Midcaps and smallcaps see stock-specific actionIn the midcap space, Marico, SAIL, Yes Bank, Nykaa and ICICI Lombard gained 1-2 per cent. On the other hand, Persistent Systems, Garden Reach Shipbuilders & Engineers, Oracle Financial Services Software, Coromandel International and Swiggy declined 1-2 per cent.Among smallcaps, Swan Energy, Netweb Technologies, Five-Star Business Finance, IFCI and Star Health rose 3-4 per cent, while IDBI Bank, Deepak Fertilisers, Firstsource Solutions, Brigade Enterprises and MRPL fell 2-3 per cent.IDBI Bank witnessed profit booking after surging nearly 17 per cent in the previous session.On the BSE, The New India Assurance Company and KNR Constructions led the gainers, rallying 6-11 per cent, while IDBI, CarTrade, Infosys and Midhani shed 2-4 per cent.The benchmarks had ended Wednesday’s session on a strong note, with the Sensex gaining 347.14 points, or 0.45 per cent, to close at 77,155.62, while the Nifty 50 rose 96.55 points, or 0.40 per cent, to 24,085.70. The indices have rallied about 4-4.5 per cent over the past four sessions, supported by easing crude oil prices and optimism surrounding the US-Iran peace negotiations.More Like ThisPublished on June 18, 2026