Dec 20 Reuters Indian shares plunged on Friday, with the benchmarks logging their first weekly decline in five weeks, as sentiment soured after the Federal Reserve projected fewer rate cuts next year, spurring an exodus of foreign funds.

The Nifty 50 dropped 1.5 to 23,587.50 points at market close, while the BSE Sensex shed 1.5 to 78,041.59.

The Nifty fell below its 200day moving average for the first time in a month.

Both the benchmarks fell nearly 5 this week while the more domesticallyfocused smallcaps and midcaps lost about 3.5.

India has borne the brunt of foreign outflows this week, largely due to the Fed39;s commentary, said Aishvarya Dadheech, chief investment officer of Fident Asset Management.

On Wednesday, the Fed cut rates as expected but scaled back its forecast to two reductions in 2025 from four earlier.

U.S. rate cuts tend to help emerging markets assets, such as Indian equities, as they boost foreign inflows.

Overseas investors sold 122.31 billion rupees 1.44 billion of Indian stocks this week until Thursday.

All of the 13 major sectors ended lower on Friday.

IT stocks, which earn a chunk of their revenue from the U.S. and are sensitive to the rate trajectory, fell 2.6.

These shares had gained earlier in the day, fueled by sector bellwether Accenture39;s solid quarterly results.

IT39;s sharp meltdown today, despite Accenture39;s upbeat results, is surprising and indicated foreign selling is happening in the sector, Aishvarya Dadheech said….