Mumbai, June 17 (TIWN) Fears of foreign funds exiting India along with expectations of lower consumer sentiment due to Covid pulled India's stock markets lower on Thursday.

Accordingly, the fears were triggered by US Fed statement on the eventual restart of liquidity tapering programme.

The US Federal Reserve has projected at least two interest rate hikes in 2023, a year earlier than forecasted in the March meeting. The development assumes significance as it can lead foreign capital away from EMs such as India.

On Thursday, the Fed's statement sent shock waves in the Asian as well as domestic markets.

However, domestic indices pared some of their initial losses.

Besides US Fed projections, sentiments remained subdued on account of a RBI report which cited that Covid's second wave had a negative impact on bank deposits and currency holdings among the public, indicating to a large outflow of funds for pandemic-related medical expenses.

Among sectors, Realty, Power, Metals, Auto, Banks were the loss leaders while IT and FMCG were the only two sectors ending in the positive zone.