Indian equity benchmarks fell on Wednesday, stalling a two-day rally even as global markets were muted ahead of the Federal Reserve meeting later in the day amid jitters after Russia stepped up its war efforts against Ukraine.
While investors mostly remained on the sidelines ahead of an expected Fed rate hike, the 30-share BSE Sensex index fell 262.96 points to close at 59,456.78, and the NSE Nifty-50 index declined 97.90 points to end at 17,718.35.
PowerGrid, IndusInd Bank, UltraTech Cement, NTPC, Larsen & Toubro, HCL Technologies, Dr Reddy's, TCS, and Bharti Airtel were the biggest laggards among the 30-share Sensex group.
Those that benefited were, however, Hindustan Unilever, ITC, Bajaj Finance, Tech Mahindra, Reliance Industries, Mahindra & Mahindra, and Nestle.
"Nifty has been in a corrective phase since the last few trading sessions. We have not seen a short-term reversal attempt succeeding and hence maintain a negative bias for the near term," said Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities.
Following the escalation of Russian President Vladimir Putin's assault on Ukraine, Treasuries, gold, and the dollar increased on safe-haven flows.
On Wednesday, the dollar surged to a fresh two-decade high on market jitters from Vladimir Putin's remarks, with the euro taking the biggest hit.
The escalation of the Russian war is likely to reverberate across markets, deepening the energy and food crisis, according to Charu Chanana, Market Strategist at Saxo Capital Markets Pte. in Singapore, told Bloomberg.
Still, European stock markets recovered from an early setback to post a modest gain. S&P 500 contract prices remained unchanged after the underlying index fell 1 per cent on Tuesday ahead of the Fed meeting.