Indian stocks decline to a week low ahead of US Fed policy decision

Indian stocks fell, tracking regional peers, as the spread of the omicron coronavirus variant and the US Fed policy decision later this week weighed on sentiment. The S&P BSE Sensex lost 0.2 per cent to 58,149.99 as of 9:25 a.m. in Mumbai, after touching a one-week low. The NSE Nifty 50 Index declined by a similar magnitude. 

Mortgage lender Housing Development Finance Corp dropped 1.4 per cent and was among the biggest drag on both measures. Of the 30 shares in the Sensex, 22 slid, while eight gained. Thirteen of 19 sectoral indexes compiled by BSE Ltd. retreated, led by a gauge of financial companies.

Investors are awaiting the outcome of the Fed’s meeting, where it’s expected to speed up stimulus withdrawal and open the door to earlier interest-rate hikes in 2022 to curb elevated inflation.

Higher US rates would impact flows into emerging markets like India, which has kept borrowing costs at a record low even amid the second-fastest pace of inflation in Asia.