Mumbai, Jun 15 (IANS): Following their global peers, the Indian equity markets fell during the mid-afternoon session on Thursday, a day after US Federal Reserve hiked its benchmark rates.

The rate-hike assumes significance as it is expected to lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India, and is also expected to dent business margins as access to capital from the US will become expensive.

Consequent to the late-night US rate hike, the Asian markets traded broadly in the red and eroded Indian investors' confidence in the highly expensive conditions in the domestic stock markets.

Heavy selling pressure was witnessed in banking, oil and gas and capital goods stocks.

Around 1.30 p.m., the wider 51-scrip Nifty of the National Stock Exchange (NSE) fell by 40.70 points -- or 0.42 per cent -- to 9,577.45 points.

The 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 31,222.89 points, traded at 31,069.51 points -- down 52.42 points or 0.28 per cent from its previous close at 31,155.91 points.

The Sensex has so far touched a high of 31,229.44 points and a low of 31,069.12 during intra-day trade.

The BSE market breadth was, however, bullish -- with 1,333 advances and 1,188 declines.

On Wednesday, the benchmark indices edged higher to close on a flat-to-positive note on the back of short covering and healthy buying in the index heavyweights such as Reliance Industries, ICICI Bank and Larsen and Toubro (LT).

The Nifty inched up by 11.25 points or 0.12 per cent to close at 9,618.15 points, while the Sensex closed at 31,155.91 points -- up 52.42 points or 0.17 per cent.