Indian benchmark equity indices, the BSE Sensex and the NSE Nifty50, started August on a negative note, tracking sluggish global cues, macro concerns and persistent foreign fund outflows.

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The US Federal Reserve cut interest rates on Wednesday by 25 basis points since 2008, but chairman Jerome Powell said further rate cuts were not imminent due to uncertainty over the US-China trade deal.

Financial markets had widely expected the Fed to reduce its key overnight lending rate by a quarter of a percentage point to a target range of 2.00 percent to 2.25 percent, but many traders expected clearer confirmation of forthcoming rate cuts.

The BSE Sensex dipped almost 227 points, or 0.61 percent, to trade at 37254 in the initial trade. The NSE Nifty50 also slipped over 68 points, or 0.61 percent, to 11050.

The Nifty MidCap index fell 107 points, or 0.68 percent, to 15813.50. The Nifty Bank slipped 162 points, or 0.56 percent, to 28714.

Nifty gainers included Wipro, PowerGrid, Bharti Infratel, Indian Oil Corp and GAIL, trading higher by up to 2.53 percent.

Zee Entertainment, Yes Bank, Vedanta, Hero MotoCorp and Eicher Motors dipped between 1 and 4 percent.

ZEEL shares dipped over 3 percent in the initial trade after the Essel Group company declared it has sold an 11 percent stake to Invesco Oppenheimer Developing Markets Fund in a deal worth Rs 4,224 crore on Wednesday.

The Subhash Chandra-promoted Essel Group has been looking to divest its stake in ZEEL in a bid to pay off its debt and aims to repay its lenders by September 2019.

Most brokerages have a 'neutral/hold' call on the stock. According to the brokerages, the stake sale will diminish the short-term problem but the company might need more stake sale to completely finish the debt.

The rupee opened

at its lowest level since June 27 on Thursday, weighed down by the US dollar, which stood at a 2-year high.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 1,497.07 crore on Wednesday, according to the provisional data.

In debt markets, the yields on the 10-year government bonds were up 0.16 percent to 6.38 percent from its previous close of 6.37 percent. Bond yields and prices move in opposite directions.

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-with inputs from agencies