Mkts snap 4-week rally as Fed rate outlook hurts

Indian shares plunged on Friday, with the benchmarks logging their first weekly decline in five weeks, as sentiment soured after the Federal Reserve projected fewer rate cuts next year, spurring an exodus of foreign funds.

- Reuters

The Nifty 50 dropped 1.5% to 23,587.50 points at market close, while the BSE Sensex shed 1.5% to 78,041.59.

The Nifty fell below its 200-day moving average for the first time in a month. Both the benchmarks fell nearly 5% this week while the more domestically-focused smallcaps and midcaps lost about 3.5%.

"India has borne the brunt of foreign outflows this week, largely due to the Fed's commentary," said Aishvarya Dadheech, chief investment officer of Fident Asset Management.

On Wednesday, the Fed cut rates as expected but scaled back its forecast to two reductions in 2025 from four earlier.

U.S. rate cuts tend to help emerging markets assets, such as Indian equities, as they boost foreign inflows.