Indian stock markets wrapped Thursday's trading session on a distressing note as investors tuned jittery after the US Federal Reserve raised interest rates by a quarter point on late Wednesday and signalled a faster pace of increases in 2017 and 2018, increasing fears that higher interest rates in US would trigger foreign investment outflows from emerging markets including India towards the US. On the domestic front, sentiments were undermined with industry body CII's report that India's economic growth will see a 'significant fall' in the second half of the current fiscal on account of cash crunch following demonetisation. As far as corporate earnings are concerned, the consumer goods sector has seen sales drop by 20 per cent in the last month. Besides, depreciation in rupee value against dollar, also weighed on the sentiments. Indian rupee tumbled by 42 paise to 67.85 against the US dollar due to appreciation of the American currency globally. However, investors got some comfort with Chief Economic Advisor Arvind Subramanian's word that the Indian economy is ‘well cushioned' to absorb the impact of US Federal Reserve's rate hike. According to Subramanian, India is seen as better equipped than its other emerging market peers to weather the impact of higher U.S. interest rates because of its stronger economic growth and record high foreign exchange reserves of more than $300 billion. Some support also came with private report stating that the Reserve Bank is expected to meet its inflation target 'comfortably' as CPI inflation is likely to remain well below 5 per cent over the first half of 2017. Meanwhile, liquor stocks such as Globus Spirits, Pincon Spirit, Radico Khaitan and United Spirits declined after the Supreme Court ordered closure of liquor shops along the national and state highways. Finally, the BSE Sensex declined by 83.77 points or 0.31% to 26519.07, while the CNX Nifty dropped 28.85 points or 0.35% to 8,153.60.

The US markets closed higher on Thursday, as investors adjusted to the Federal Reserve's plan for a faster path of interest-rate increases in 2017. After a pullback following the Fed decision Wednesday, stock- indexes resumed their post-election march. The market disregarded Fed chief Janet Yellen's view that the shift in the so-called ‘dot plot' was small, and not all members actually agree that rates need to rise next year. On the economy front, the number of Americans who applied for unemployment benefits in early December week running from December 4 to December 10 fell by 4,000 to 254,000, reflecting the extremely low level of layoffs taking place in the economy. New claims usually swing up and down during the holiday season that stretches from Thanksgiving to early January. But they have been remarkably stable for months at levels last seen in the early 1970s. Initial claims fell under 300,000 in early 2015 and have remained below that key threshold for 93 straight weeks, the longest streak since 1970. Meanwhile, two gauges of manufacturing sentiment climbed in December, another indication of the upbeat corporate mood in the wake of President-elect Donald Trump's surprise victory. The Dow Jones Industrial Average added 59.71 points or 0.30 percent to 19,852.24, Nasdaq was up 20.19 points or 0.37 percent to 5,456.86, while S&P 500 gained 8.75 points or 0.39 percent to 2,262.03.

Crude oil futures continued their decline on Thursday albeit modestly as announcement of the US interest rate hike strengthened the dollar that weighed on the commodity prices including crude. A stronger dollar is bearish for crude, which is priced in the US currency and becomes more expensive for holders of other currencies. However, a surprisingly large drawdown in US oil inventories prevented more significant drop in oil prices. Benchmark crude oil futures for January delivery declined by $0.14 or 0.3 percent to $50.90 on the New York Mercantile Exchange. In London, Brent crude for February delivery ended lower by $ 0.52 or 0.96 percent at $53.38 on the ICE.

Indian rupee ended considerably weaker against the US dollar on Thursday due to fresh demand for the American currency from banks and importers. Rupee sentiments were pessimistic after the US Fed hiked key interest rates by 25 basis points for the first time in a year in response to a strengthening US economy. Sentiments also remained dampened with industry body CII's statement that India's economic growth will see a ‘significant fall' in the second half of the current fiscal on account of cash crunch following demonetisation. Meanwhile, investors were unable to get any respite with Chief Economic Advisor Arvind Subramanian's word that the Indian economy is ‘well cushioned' to absorb the impact of US Federal Reserve's rate hike. According to Subramanian, India is seen better equipped than other emerging market peers to weather the impact of higher U.S. interest rates because of its stronger economic growth and record high foreign exchange reserves of more than $300 billion. Finally, the rupee ended at 67.83, 39 paise weaker from its previous close of 67.44 on Wednesday.

The FIIs as per Thursday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 4295.79 crore against gross selling of Rs 4772.86 crore, while in the debt segment, the gross purchase was of Rs 660.86 crore with gross sales of Rs 534.12 crore.

The US markets managed a positive close but were off the highs of the day in last session, as traders continued to digest the Federal Reserve's decision to raise interest rates by a quarter point on Wednesday. The Asian markets have made mostly a positive start, though a stronger U.S. dollar weighed on commodity prices and dragged down resources stocks. The dollar was trading near an almost 14-year high versus the euro as the Federal Reserve's more hawkish outlook invigorated its post-election rally. The Indian markets continued the weak trend and ended with over a quarter percent of loss in last session in the aftermath of the US Fed's interest hike decision and hint of an aggressive pattern of rate increases next year. Today, the start is likely to be flat to cautious and the commodity stocks will be under pressure tailing their global counterparts. Traders will also be reacting to the report of widening trade deficit. India's trade deficit widened to $13 billion in November from a provisional $10.16 billion last month, it's the highest since $13.08 billion in July 2015, and sharply wider than the $10.41 billion gap in October. Though, for the third consecutive month, exports recorded a positive growth of 2.29 per cent year-on-year to $20 billion, but imports grew at a faster pace of 10.4 percent to $33.02 billion. Traders however, will be getting some support with the statement of chief economic adviser at the ministry of finance Arvind Subramanian that India is as better equipped than other emerging markets to weather the impact of higher US interest rates because of its stronger economic growth and record high foreign exchange reserves of more than $300 billion. Meanwhile, Finance Minister Arun Jaitley has said that the government and the Reserve Bank are taking measures to bring down the digital transaction cost with an aim to move towards a less-cash economy.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

  Nifty Top volumes

• Cipla's wholly owned subsidiary in Netherlands - Cipla Holding B. V. (Cipla Netherlands), has entered into a joint venture agreement with Ahran Tejarat Company to incorporate a joint venture company in Iran.
• NTPC will spend Rs 50,000 crore to replace 11,000 MW of ageing, inefficient plants with modern energy-efficient power stations.
• Bajaj Auto is all set to launch its much-awaited 400cc bike - Dominar 400 on December 15, 2016.
• Bharti Airtel's wholly owned subsidiary - Airtel Payments Bank has rolled out its pilot services in Andhra Pradesh and Telangana.
• Infosys has made an investment from its Innovation Fund in ideaForge, an Indian startup focused on Unmanned Aerial Vehicle solutions.