Mumbai, Sep 21 (IANS): Mixed global cues, coupled with heavy selling pressure in banking, consumer durables and metal stocks, dragged the key Indian equity indices lower during the mid-afternoon trade session on Thursday.
According to market observers, investors remained cautious as the US Federal Reserve on Wednesday night signalled another rate-hike in December, while kept its interest rates steady for now. A rate-hike can potentially lead foreign portfolio investors (FPI) away from emerging markets such as India.
The US Fed also announced that it would start unwinding its $4.5 trillion balance sheet from October, a further step to end the loose monetary policy.
Around 1 p.m., the wider Nifty50 of the National Stock Exchange (NSE) traded lower by 43.70 points, or 0.43 per cent, at 10,097.45 points.
The 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 32,406.42 points, traded at 32,287.35 points -- down 113.16 points, or 0.35 per cent, from its previous close at 32,400.51 points.
The Sensex has so far touched a high of 32,462.61 points and a low of 32,164.42 during intra-day trade.
The BSE market breadth was bearish -- 1,564 declines and 824 advances.
Dhruv Desai, Director and Chief Operating Officer of Tradebulls, said the benchmark indices extended losses as Asian markets were trading mixed after the US Fed signalled it expects another interest rate hike by year-end and disclosed timing for reducing its balance sheet.
"The Fed left rates unchanged for now, as was widely anticipated, but investors' expectations changed for December after the US central bank signalled one more rate hike by year-end despite recent weak inflation readings," Desai told IANS.
"Top gainers on the NSE were Dr. Reddy's Lab, Lupin and Cipla, while on the losing side were Tata Motors (DVR), Hindalco and Coal India."
On Wednesday, benchmark indices closed with fractional losses as heavy outflow of foreign funds and selling pressure kept investors' sentiments subdued.
The Nifty50 of the National Stock Exchange (NSE) fell by 6.40 points or 0.06 per cent to close at 10,141.15 points, while the Sensex closed at 32,400.51 points -- down 1.86 points, or 0.01 per cent.