Sensex, Nifty snap four-day rally; rate hike fears spook investors

Benchmark index Sensex closed on a low due to sell-off in IT and pharma stocks on concerns that the US Federal Reserve is likely to go for aggressive rate hikes.

Benchmark Sensex declined 224 points on Wednesday, snapping its four-session winning streak, mainly due to sell-off in IT and pharma counters amid rising concerns over possible aggressive interest rate hikes to tame high inflation.

The 30-share index rebounded more than 1,200 points from the early lows before settling at 60,346.97 points, a total loss of 224.11 points or 0.37 per cent compared to Tuesday's closing level.

The broader NSE Nifty closed lower 66.30 points or 0.37 per cent at 18,003.75 points.

With the higher than expected inflation reported in the US in August, there are now concerns that the US Federal Reserve is likely to go for aggressive rate hikes, pushing global markets into the red.

The Sensex had plunged 1,150 points to a low of 59,417.12 points while the Nifty declined to a low of 17,771.15 points in early trade on Wednesday following deep losses in US markets.

Gains in banking shares helped the indices recover from early lows but selling in IT, energy and pharma shares restricted the gains.

Infosys fell the most by 4.53 per cent among the Sensex scrips. TCS, Tech Mahindra, HCL Tech, L&T, Wipro, and Reliance were among the major losers.