Sensex Down Nearly 400 Points On Hawkish Fed; Nifty Nears 17,850

Indian shares fell notably in early trade on Wednesday after Fed Governor Lael Brainard, who is awaiting Senate confirmation to serve as the Fed’s vice chairwoman, called the task of reducing inflation pressures “paramount” and indicated an aggressive approach to shrinking the Fed’s balance sheet.

The benchmark S&P BSE Sensex dropped 390 points, or 0.6 percent, to 59,789 while the broader NSE Nifty index was down 104 points, or 0.6 percent, at 17,853.

Financials led losses, with HDFC, HDFC Bank, Kotak Mahindra Bank and Axis Bank falling 1-2 percent. IT stocks were also broadly lower.

Larsen & Toubro rose about 1 percent on news its transportation infrastructure arm has bagged various orders from prestigious clients.

Lupin gained 0.6 percent after it signed a licensing deal with Alvion Pharmaceuticals to commercialize medicines for cardiometabolic diseases in Southeast Asia.

NTPC climbed more than 2 percent. The state-run power utility has inked a pact with Gujarat Gas for an initiative to blend green hydrogen with the piped natural gas.

Tata Steel gained almost 2 percent despite reporting a 3 percent fall in steel output during the fourth quarter ended March.