Sensex closes 98 points lower, Nifty at 7,749 on fears of Fed rate hike in June

Extending losses for the third straight session on Friday, the S&P BSE Sensex settled the day 98 points lower in a volatile trading day, while the broader CNX Nifty ended a tad below its key 7,750-mark.

Sentiment on the Street remained cautious after comments from a key Federal Reserve official led to increased expectations of the US Federal Reserve hiking interest rates as early as next month.

On Thursday, New York Federal Reserve President William Dudley said the US economy could be strong enough to warrant a rate increase in June or July.

Comments reinforced surprisingly clear signals of a possibly imminent rate hike in minutes of the Federal Reserve's April policy meeting and underpinned an already-firm greenback.

The 30-share index ended the day at 25,301, down 97.82 points, while broad-based 50-share index quoted 7,749, down 33.70 points at close.

Market breadth remained largely weak for the day, with every two BSE stocks declining for every one stock that gained.

A total of 2,747 stocks on BSE that traded for the day, 1,684 ended lower, 882 gained, while 181 remained unchanged.

"The market is a bit nervous about the possibility of a rate hike by the Fed next month. If global markets crack, then our markets will definitely follow suit," said Deven Choksey, managing director, KR Choksey Securities.

Lupin was the worst performing stock on the Sensex and ended the day 9.10 per cent lower on the Bombay Stock Exchange (BSE).

ITC stock gained 1.55 per cent after the company met Street expectations in its March quarter earnings with 5.6 per cent growth in net profit year-on-year.

Among decliners, airline SpiceJet slumped 10.37 per cent due to a one-time expense of Rs 173 crore.

Drugmaker Lupin declined 9.10 per cent as worries about its future persisted as it has yet to resolve concerns raised by US FDA's observations in March.