Indian shares fall over 2% as US Fed stokes fear of rate hikes

Indian shares fell over 2% on Monday, in line with Asian peers, as a hawkish U.S. Federal Reserve stoked fears of aggressive rate hikes.Fed Chair Jerome Powell’s promise of policy “pain” to contain inflation quashed hopes that the central bank would soften its rate hike stance to prevent an economic slowdown.The NSE Nifty 50 index was down 2.1% at 17,190, as of 0347 GMT, while the S&P BSE Sensex dropped 2.14% at 57,572.12.Powell’s speech comes at a time foreign investors are returning to Indian stocks after dumping them in the first half, as they look for higher returns amid expectations that major central banks will slow their rate hike cycle.Rate sensitive realty index was down 2.8%, while the IT index slumped 4.4%.Also Read | Food output may drop this year amid price rise concernsTwo Fed officials, James Bullard and Esther George, on previous Thursday gave divergent signals on the size of the next interest-rate hike. The officials from reaffirmed their commitment to increasing interest rates until inflation is under control.The move had resulted in a sharp fell of for cryptocurrencies.Bitcoin, the largest virtual coin by market capitalisation, fell to its lowest level since late July and plunged to as low as 9.1% to $21,281.

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