(Updates for close)

By Kashish Tandon

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 200-day moving average for the

first time in a month.

Both the benchmarks fell nearly 5% this week while the more

domestically-focused smallcaps and midcaps

lost about 3.5%.

"India has borne the brunt of foreign outflows this week,

largely due to the Fed'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 Accenture's ( ACN ) solid quarterly results.

"IT's sharp meltdown today, despite Accenture's ( ACN ) upbeat

results, is surprising and indicated foreign selling is

happening in the sector," Aishvarya Dadheech said.

Heavyweight financials fell 1.3%, with private

lender Axis Bank shedding 3.3%.

Battery maker Amara Raja Energy & Mobility climbed

as much as 5% after Hyundai Motor India said it will

equip its domestic cars with the company's absorbent glass mat

battery technology.

($1 = 85.0860 Indian rupees)

(Reporting by Kashish Tandon in Bengaluru; Editing by Eileen

Soreng, Sonia Cheema and Mrigank Dhaniwala)