India's blue-chip stock indexes snapped a three-day winning streak on Thursday after the U.S. Federal Reserve hinted at further interest hikes later this year, but the domestically oriented mid-cap index rallied to a fresh record high.

The blue-chip Nifty 50 index closed 0.36 per cent lower at 18,688.10, while the benchmark S&P BSE Sensex lost 0.49 per cent to 62,917.63. Both indexes are about 1 per cent shy of their all-time highs.

Eight of the 13 major sectoral indexes declined. IT companies, which get a significant share of revenue from the U.S., lost over 0.5 per cent after the Fed kept rates unchanged, as expected, but signaled the need for borrowing costs to rise.

On the other hand, the mid-cap index hit a new record high, while the small-cap index rose 0.15 per cent to a fresh 52-week high.

The more locally focussed indexes have rallied strongly -the mid-cap index is up nearly 19.5 per cent since its 2023-low hit in April- in the past few weeks, outpacing their blue-chip peers, as inflation eased, economic growth picked up and the central bank held interest rates.

"Not just the benchmarks, the small-caps and mid-caps have seen a tremendous run-up in the recent weeks," said Saurabh Jain, assistant vice president for retail equities research at SMC Global Securities.

"The markets are likely to take a pause and a slight correction would only be healthy".

Fast moving consumer goods (FMCG) stocks advanced over 0.5 per cent. Jain said a gradual improvement in rural demand and a fall in prices of key raw materials like crude oil and soda ash have aided the rise of FMCG stocks.

Among individual stocks, shares of Fortis Healthcare and Apollo Hospitals rose over 4 per cent each after JP Morgan rated the stocks "overweight".

On the other hand, shares of Hero MotoCorp lost 3.02 per cent after Reuters reported that the ministry of corporate affairs ordered a probe to assess the company's role in a case related to alleged diversion of funds.

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