Indian equity benchmarks fell on Thursday, driven by global gloom for risk assets as investors reassessed US rate hikes pivot risks after a slew of Federal Reserve policymakers suggested otherwise.
The BSE Sensex index fell 88.98 points, or 0.14 per cent, to 61,891.74 in early trade after closing at a record high in the previous session of 61,980.72. The NSE Nifty index dipped 35.80 points, or 0.19 per cent, to 18,375.85.
The top laggards in early trade from the Sensex pack included Titan, Tech Mahindra, HCL Technologies, Tata Steel, Kotak Mahindra Bank, Mahindra & Mahindra, and Maruti.
Among the winners were Larsen & Toubro, Axis Bank, ICICI Bank, Power Grid, and Hindustan Unilever.
"The market is likely to struggle in early trades on Thursday, tracking weakness across the Asian indices after US gauges faltered in overnight trades. The escalating war situation in Ukraine is making investors nervous as its ramifications are huge on global trade," Prashanth Tapse, Senior Vice President for Research at Mehta Equities.
"Besides, rising covid infections in China, and the US Fed indicating that the rate hike situation may not stop soon could trigger bouts of volatility. Also, traders are not uncomfortable with the high valuation of Indian markets, hence periodic profit-taking will continue on the street," he added.
Following stronger-than-expected retail sales figures, Asian markets were mixed on Thursday, the dollar stabilised and Treasury yields remained depressed as investors asses the direction of Fed policy.
In an effort to temper recent market optimism that the US central bank may pivot and change course due to cooling consumer and producer pricing data, Fed policymakers' rhetoric has remained hawkish.
US central bank's most dovish member, San Francisco Fed President Mary Daly, said pausing the hiking cycle was off the table and was not part of the discussion.
While bulls might have expected to have the upper hand on easing geopolitical tensions, Ms Daly's comments pushed Wall Street stocks into the red.
"Fed speakers were clear that a pause is not imminent," Ted Nugent, a Markets Economist at National Australia Bank, wrote in a client note, reported Reuters.
"Like the resilient spending (retail inflation) numbers, (that) gave little succour for anyone looking for an imminent pivot," resulting in "a more cautious tone in markets," he said.