Sensex drops 170 points after Fed disappoints Street

NEW DELHI: After a couple days of gains, domestic indices saw profit booking as the US Fed reiterated its pledge to support the economy but did not announce any additional stimulus that the Street was expecting.

The losses were checked by bullish commentary from the central bank that also signalled it expects the US economic recovery from the coronavirus crisis to accelerate with unemployment falling faster than the central bank expected in June.

At 09.28 am, BSE flagship Sensex was down 166.54 points or 0.42 per cent at 39,136.31 while NSE benchmark Nifty slipped 46.40 points or 0.40 per cent to 11,558.15. Pharma and media stocks saw buying while some financial services and banking names were under pressure.

In the 30-share pack Sensex, HCL Tech was the biggest gainer, up 2.65 per cent at Rs 810.30. It was followed by Tech Mahindra, ONGC, Asian PAints, Infosys and Tata Steel that gained in the range of 0-2 per cent.

M&M was the biggest loser in the pack, down 1.24 per cent to Rs 631.70. Power Grid, HDFC Bank, ICICI Bank, Kotak Mahindra Bank and Bajaj Auto were among other major losers, falling in the range of 1-2 per cent.

Broader market indices came under pressure and were trading marginally lower. Nifty Smallcap slipped 0.05 per cent while Nifty Midcap dipped 0.03 per cent. Broadest index on NSE, Nifty 500 was down 0.22 per cent.

Nifty Media was the biggest sectoral gainer on NSE, rising 0.64 per cent. It was followed by Nifty IT that gained 0.25 per cent. On the other hand, Nifty Bank fell the most in early trade, down 0.93 per cent, followed by Nifty Private Bank and Nifty Financial Service.

Globally, stocks fell and the dollar advanced after the Federal Reserve pledged to keep interest rates low for a long time but stopped short of offering further stimulus to shore up a battered US economy.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.82 per cent, running out of steam after five straight days of gains. Japan's Nikkei shed 0.45 per cent.

U.S. S&P 500 futures fell 0.87 per cent in Asia on Thursday following a 0.46 per cent drop in the S&P 500 on Wall Street. Tech shares fared worse, with the Nasdaq Composite dropping 1.25 per cent on Wednesday. Nasdaq futures dropped 1.13 per cent in Asia.