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Indian shares slipped and the rupee weakened on Thursday, as the Federal Reserve’s signal to raise interest rates sooner than expected spooked investors.

The blue-chip NSE Nifty 50 index was 0.48% down at 15,691.40 and the benchmark S&P BSE Sensex was 0.34% lower at 52,323.33 at close.

The rupee dropped 1% to 74.08 against the dollar, its weakest level since early May, while India’s benchmark 10-year bond yield ended slightly lower at 6.04% after rising up to 6.06% earlier in the session.

Financials stocks were top drags on the Nifty 50, with HDFC Bank Ltd, HDFC Ltd and ICICI Bank Ltd shedding more than 1% each.

The Nifty Bank Index and the Nifty Private Bank Index, which have fallen over 1.25% so far this week, lost 1.14% and 1.18%, respectively.

Globally, stocks were heading for their biggest fall in weeks. The Federal Reserve officials on Wednesday moved their first projected rate increases from 2024 to 2023 and opened talks about when to pull back on the $120 billion in monthly bond purchase.

Among other notable stock moves in India, Adani Ports and Special Economic Zone Ltd fell 8.5% in the eighth consecutive session of losses and was among the top drag on the Nifty 50, even after the company earlier this week rejected a media report that said accounts of three foreign investor funds that own Adani Group stocks had been frozen.

Countering some of these losses were software services firms Infosys Ltd and Tata Consultancy Services Ltd, rising 0.9% and 1.3%, respectively.

The Nifty IT index was up 0.57%. It has gained 1.40% so far this week.

LNG’s share of Indian gas demand: The share of liquefied natural gas (LNG) in India’s gas consumption could rise to 70% from the current 50% in 10 years, and new import terminals are needed, the chief executive of the country’s top gas importer said.

Prime Minister Narendra Modi has set a target to raise the share of natural gas in the country’s energy mix to 15% by 2030 from the current 6.3% to cut its carbon footprint.

To meet that target India’s gas consumption needs to rise to 640 million standard cubic meters a day (mmscmd) from the current 155 mmscmd, A.K. Singh, chief executive of Petronet LNG Ltd, said at ET Energy Leadership summit.

Indian companies are investing billions of dollars to strengthen gas infrastructure, including laying 15,000-kilometer pipelines to supply cleaner fuel to households and industries. India currently has 17,000 kms of gas pipeline network.

Also, LNG projects of 19 million tonnes per annum (mtpa) capacity are under construction and plans are afoot to increase use of LNG in trucks and buses.

“With limited increase in domestic gas supply LNG will play a major role in catering to this incremental demand and share of LNG in natural gas consumption is likely to increase from present 55 to 70% in coming 9-10 years,” Singh said.

Petronet operates two LNG terminals in India accounting for about 53% of nation’s existing 42.5 mtpa import capacity.

Singh said India needed to increase its LNG import capacity to 155 mtpa “considering 80% utilisation” to boost use of the cleaner fuel.

India imports about 85% of its oil needs. He said replacing about 30% of the country’s crude oil imports with LNG would save $10 billion at current global oil price of $74/barrel.

Separately, Swiss exports of gold to India plunged in May, Swiss customs data showed, as the world’s second-biggest bullion consumer grappled with a surge in coronavirus infections. Shipments from Switzerland to China, the biggest gold market, remained strong for a second month, the data showed. Switzerland is the world’s largest gold refining centre and transit hub. Its numbers provide an insight into global market trends. Demand for gold in India and China plunged when the pandemic began last year, closing jewellery outlets and hurting incomes. The Indian market began to recover quickly, but Chinese imports of gold rebounded only in recent months. Following are numbers for May and comparisons.

Gold prices slipped over 2% at one point on Thursday after the US Federal Reserve projected a sooner than anticipated interest rate hike.

Spot gold fell 1.6% to $1,782.86 per ounce by 9:53 am EDT (1353 GMT) having touched its lowest since May 5 at $1,775.40 an ounce.

US gold futures slid 3.9% to $1,788.30 per ounce.

A majority of 11 Fed officials on Wednesday projected at least two quarter-point rate rise for 2023, although officials in their statement pledged to keep policy supportive for now to encourage a jobs recovery.

The announcement spurred a rise in the dollar to scale an over two-month high and a jump in yields, further adding to bullion’s woes. Higher yields raise the opportunity cost of holding non-yielding bullion.

“The Fed’s dot plot is providing a clear change in tone, ultimately suggesting that although the Fed continues to reiterate that inflation is transitory, their formal assessment of risks to the economy is decisively more hawkish,” said TD Securities commodity strategist Daniel Ghali.

Ghali added that weakening physical demand and slowing speculative flows into gold, that began before the Fed policy meeting, could also create an environment for a further pullback in the precious metal.