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Investors jittery after surprise rate hike, markets see worst week in 5 months
Photo Credit: Reuters

The markets closed over 1% lower Friday and registered their worst week since November, as investors fretted that fast-paced interest rate hikes to fight surging inflation would slow global economic growth.

The Nifty 50 was down 1.63% at 16,411.25 at close, with most of its sub-indices in the negative territory. The Sensex fell 1.56% to 54,835.58.

The Rupee weakened as much as 0.9% to 76.97 against the dollar earlier in the session, its lowest level since March 7. It settled at 76.91.

Oil-to-retail conglomerate Reliance Industries fell 0.8% ahead of its results for the quarter-ended March.

Agrochemical maker UP was down 4.4%. The company said there was a fire at one of its plants at Ankleshwar in Gujarat that injured five people and that the company was investigating the cause.

The benchmark indices also posted a fourth consecutive weekly fall, weighed down by a surprise interest rate hike by the Reserve Bank of India, foreign fund outflows and mixed corporate earnings results.

Foreign investors have net sold Indian equities worth $635 million so far this week, compared with $881 million offloaded in the same period last week, according to Refinitiv data.

"Domestic markets are lower on the global headlines, which are focusing more on high inflation as well as the Fed rate increase two days ago," said Prashanth Tapse, vice president of research at Mehta Equities.

The Fed on Wednesday raised interest rates by half a percentage point as expected and Chair Jerome Powell explicitly ruled out a 75-basis-point hike in the next policy meeting.

Nifty's Metal, IT, Finance and Realty were among the top sectoral losers, declining between 2% and 3.5%.

Global stocks fell on Friday as markets anticipated more US rate hikes, while Asian peers declined on fears about the hit to growth from China's zero-COVID policy.

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