NEW DELHI: Domestic stocks saw selling pressure in Thursday's trade as investors digested the hawkish Fed minutes of the December 14-15 policy meet that suggested earlier than expected rate hikes by the US central bank.

Policymakers in the US not only felt that the job market was nearly at levels healthy enough that the Fed's low rate regime was no longer required, they were also concerned over rising inflation. In fact, futures on the federal funds rate priced in a roughly 80 per cent chance of a quarter-percentage-point rate hike in the March policy review now.

"Incoming labour market data remain strong across jobless claims, hiring surveys and consumer measures. We believe it is too early to see an impact of the Omicron variant," Nomura said in a note. This may not bode well for emerging markets like India in the short term.
The market feels that the first rate hike may come in March itself, V K Vijayakumar of Geojit Financial Services said, adding that the sharp moves in the bond and stock markets is an indication that volatility is in the store for 2022.
The US benchmark 10-year Treasury yield last stood at 1.73 per cent, up 1.69 percentage points.

As a result, fear gauge India VIX, which indicates the expected market volatility over the next 30 calendar days, surged 6.21 per cent to 18.30.

Sensex slipped over 828 points to 59,394.43. By 11 am, Nifty50 was quoting at 17,689.25, down 236 points.

The level of 17,700 was a key support where some experts were expecting buying to re-emerge. For now, there was no such sign.

IT and financial stocks declined the most. HDFC tanked 1.89 per cent to Rs 2,619. HCL Tech, HDFC Bank and Infosys declined 1.78 per cent, 1.65 per cent and 1.48 per cent, respectively.
Kotak Mahindra Bank, Tech Mahindra, Bajaj Finserv, Bajaj Finance and SBI fell up to 1.2 per cent.

Bharti Airtel, Sun Pharma, Dr Reddy's Labs and Tata Steel were the only gainers in the Sensex pack, rising up to 1 per cent.

Shares of NHPC rose 1.75 per cent to Rs 32.05 after the state-owned hydropower giant signed a pact with Green Energy Development Corporation of Odisha to form a joint venture (JV) for setting up a 500-megawatt (MW) floating solar power project in Odisha.
Shares of Spandana Sphoorty Financial fell 3.54 per cent to Rs 400.10 after the microfinance company posted a consolidated loss of Rs 57.94 crore for the second quarter ended September 30. The company had posted a net profit of Rs 66.76 crore for the corresponding quarter of the previous financial year.

Earlier in the day, China's Shanghai Composite slid 0.7 per cent to 3,571.18 while Japan's Nikkei 225 in Tokyo tumbled 2.1 per cent to 28,721.49. Hang Seng in Hong Kong lost 0.6 per cent to 22,774.93. Kospi in Seoul retreated 0.4 per cent to 2,942.54.