Markets pare losses, trade higher as realty, banking stocks gain; IT drags amid Fed’s hawkish signals

Indian equity benchmarks opened in positive territory on Thursday, supported by gains in realty, banking, and financial stocks, even as weakness in information technology shares capped broader upside. 

At 10 am, the BSE Sensex was up 90.12 points, or 0.12%, at 77,245.74 while the NSE Nifty50 advanced 34 points, or 0.14%, to trade at 24,119.70. 

Market sentiment remained mixed after the US Federal Reserve kept interest rates unchanged but signalled the possibility of tighter monetary conditions ahead. The Federal Open Market Committee maintained the federal funds target range at 3.5%–3.7%. Although Fed Chair Kevin Warsh refrained from providing a clear rate outlook, the central bank’s dot plot indicated that policymakers continue to see the possibility of a rate hike in 2026. 

Technology stocks remained under pressure following the Fed’s commentary. Among the top laggards on the Nifty50 were Infosys, HCLTech, and Tata Consultancy Services, dragging the Nifty IT index lower. 

Broader markets, however, showed resilience. The Nifty MidCap index traded 0.17% higher, while the Nifty SmallCap index gained 0.24%. 

Sectorally, the Nifty PSU Bank, Nifty Metal, and Nifty Consumer Durables indices emerged as top performers, reflecting investor preference for domestic cyclicals and value-oriented sectors. The Nifty IT index posted the sharpest decline among sectoral gauges. 

Asian markets also traded firmly, providing support to domestic equities. Benchmarks in Japan and South Korea touched fresh highs after the United States and Iran signed an initial agreement aimed at ending hostilities and easing geopolitical tensions. 

The gains in Asia came despite a weak overnight session on Wall Street, where investor concerns resurfaced over the possibility of further rate hikes by the Federal Reserve to control inflation. 

Global risk sentiment improved early Thursday, with US futures moving higher and crude oil prices extending losses. 

Brent crude futures declined after the interim agreement between Washington and Tehran raised expectations of the reopening of the Strait of Hormuz and a waiver of US sanctions on Iranian oil exports. Brent’s June futures contract traded at $78.37 per barrel on the Intercontinental Exchange, down 1.48%. 

Precious metals also weakened, with gold and silver futures falling 0.93% and 1.9%, respectively. 

In the currency market, the Indian rupee depreciated by 21 paise to 94.71 against the US dollar in early trade, reversing gains from the previous session. 

Forex dealers attributed the weakness in the rupee to the strengthening of the US dollar following the Fed’s hawkish tone. The dollar index climbed to 100.23, marking a four-month high as markets priced in the possibility of at least one quarter-percentage-point rate increase later this year. 

At the interbank foreign exchange market, the rupee opened at 94.66 and weakened further to 94.71. On Wednesday, the domestic currency had settled 10 paise stronger at 94.50 against the US dollar.