Indian shares tumble after Fed projects fewer rate cuts next year
Updates at market open
Dec 19 (Reuters) -Indian shares dived on Thursday, led by U.S.-rate sensitive information technology stocks, after the Federal Reserve projected fewer interest rate cuts in 2025, citing sticky inflation and strength in the world's largest economy.
The NSE Nifty 50 .NSEI fell 1% to 23,969.25 points as of 09:15 a.m. IST, while the BSE Sensex .BSESN dropped 0.9% to 79,441.58.
Both the benchmark indexes have lost over 3% so far this week and are headed for their first weekly decline in five.
The Fed delivered a 25-basis-point rate cut overnight, as was widely expected, but forecast just two quarter-percentage-point reductions in 2025, which is half a percentage point less than officials had anticipated in September.
Rate cuts in the U.S. typically help emerging market assets, such as Indian equities, as they boost foreign inflows.
The more domestically-focussed smallcaps .NIFSMCP100 and midcaps .NIFMDCP100, as well as all 13 major subsectors retreated in early trade.
IT firms .NIFTYIT, which earn a significant chunk of their revenue from the U.S., led losses with a 2% plunge.
Reporting by Hritam Mukherjee and Kashish Tandon in Bengaluru; Editing by Sumana Nandy and Mrigank Dhaniwala
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