Shares ended lower after a choppy Wednesday session, as Russia's escalation of the conflict in Ukraine further soured sentiment of investors already bracing for a super-sized interest rate hike by the Federal Reserve.
The NSE Nifty 50 index ended 0.55% lower at 17,718.35, while the S&P BSE Sensex slipped 0.44% to 59,456.78.
Investors fled risky assets after Vladimir Putin ordered a partial mobilisation of Russia's military reserves and accused the West of "nuclear blackmail," building anxiety in investors who were already on the sidelines ahead of the Fed's decision expected later in the day. [MKTS/GLOB]
Rate futures traders are pricing in an 81% chance of a 75-basis-point (bp) hike and a 19% probability of a jumbo 100 bps increase, as inflation stayed elevated. [FEDWATCH]
Meanwhile, Reuters reported that India's government was in no hurry to tamp down inflation - now hovering near 7% at eight-year high - back to the central bank's 4% medium-term target, for fear that aggressive rate hikes could hurt economic growth.
India's central bank is due to meet next week to decide on monetary policy.
Putin's move caused a surge in oil prices on Wednesday, which could prove costly for India, the world's third-largest importer of oil. [O/R]
The Nifty Metal index was the worst performer among sub-indexes, dropping 2.1% in its worst day in a month.
Conglomerate Adani Enterprises, which touched a record high in the previous session, lost 5.1%, marking its worst session since mid-June.
Shree Cement was the biggest percentage loser on the Nifty 50 with a 5.2% drop - its sharpest fall since late-February.
The Nifty fast-moving consumer goods index was the only bright spot, rising 1.2% led by a near 3% jump in FMCG major Britannia Industries.
Central Bank of India rose 6.6%, after jumping as much as 15% in the session, following an RBI move to take the state-owned lender off its prompt corrective action list.
