Mumbai, Sep 22 (IANS): Indian equities have fallen on Thursday after the US Fed turned more hawkish than anticipated, increasing its rate forecast, dealers said.

At close, Sensex closed 337.06 points or 0.57 per cent down at 59,119.72, and Nifty ended 88.55 points or 0.50 per cent at 17,629.80. About 1,814 shares have advanced, 1,628 have declined and 147 shares remained unchanged.

HDFC Bank, Axis Bank, HDFC, Bajaj Finance, ICICI Bank were major losers on the Sensex. Nifty Financial Service index fell 1.38 per cent and BSE Private Bank index closed 1.47 per cent down.

"Fed turned more hawkish than anticipated increasing its rate forecast to 4.4 per cent by the end of 2022. The indication is that 125 bps more rate hikes can be expected in the next 2 policy meetings scheduled this year," said Vinod Nair, Head of Research at Geojit Financial Services.

The US Federal Reserve raised rates by 75 basis points as expected and flags more hikes.

The Fed's new projections showed its policy rate rising to 4.4 per cent by the end of the year, before peaking at 4.6 per cent in 2023 to curb uncomfortably high inflation. Rate cuts are not expected until 2024. He added that the Fed's actions are likely to result in slower growth and higher unemployment.

Fed Chair Jerome Powell said the bank needed to take much more aggressive measures to combat red-hot inflation, and was prepared to put some pressure on the economy and the job market as a result.

After the rate hike, the benchmark 10-year US Treasury yield jumped to 3.64 per cent, its highest level since 2011, while the two-year yield hit a fresh 15-year high of 4.13 per cent on Thursday.

Amid all, the broader indices outperformed and gained nearly 0.5 per cent each.

"The recent movement in the index shows indecisiveness amid the global uncertainty and it may take some time to subside. Meanwhile, we recommend focusing more on overnight risk management and limiting leveraged positions," said Ajit Mishra, VP - Research, Religare Broking Ltd.