* NSE index down 0.62 pct, BSE index 0.58 pct lower
* Fed forecasts two more rate raises this year
By Jessica Kuruthukulangara
June 14 (Reuters) - Indian shares fell on Thursday, in line with Asian peers, as the Federal Reserve raised U.S. interest rates and struck a more hawkish tone in forecasting a slightly faster pace of tightening.
Asian shares dropped after the Fed raised its benchmark overnight lending rate to a range of 1.75 percent to 2 percent and forecast two additional hikes by the end of this year, compared to one previously. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.16 percent.
“People are a bit nervous because of the Fed’s hawkish tone and since the Fed may increase the pace of tightening. Moreover, there is an overhang from the European Central Bank (ECB) policy as all these central banks are on the reverse course now,” said Saurabh Jain, AVP - Research, SMC Global Securities.
The ECB at its meeting on Thursday will debate whether to end a massive bond purchase scheme later this year, taking its biggest step yet in dismantling crisis-era stimulus credited with reviving growth after a double-dip recession.
India’s broader NSE index was down 0.62 percent at 10,789.90 as of 0611 GMT, while the benchmark BSE index was 0.58 percent lower at 35,531.58. The indexes were set to snap a three-session gaining run.
The Nifty IT index fell as much as 1.5 percent and was on track to end a six-session winning streak. Infosys Ltd lost 2.6 percent.
Lenders also fell, with the State Bank of India retreating 2.1 percent. The Nifty PSU bank index lost as much as 1.9 percent, after gaining in the last six sessions.
ICICI Prudential Life Insurance Co Ltd dropped as much as 2.9 percent after ICICI Bank Ltd said it would sell a 2 percent stake in the insurer.
Oberoi Realty Ltd dropped as much as 3.6 percent after the real estate developer said it would offer shares to institutional investors.
Meanwhile, shares of Ruchi Soya Industries Ltd, which has been undergoing an insolvency resolution process since December, climbed 4.7 percent to hit their upper price limit after the edible oil producer said its committee of lenders declared Adani Wilmar Ltd as top bidder for the company. (Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Amrutha Gayathri)