The Indian stock market opened on a mixed note Wednesday as investors eagerly awaited the U.S. Federal Reserve’s interest rate decision later in the day. The Sensex opened slightly lower at 83,037.13, while the Nifty50 started the day at 25,402.40, both marginally down from their previous closes.
Global markets showed cautious optimism ahead of the Fed’s announcement, with most Asian stocks rising in early trade. However, U.S. stocks closed nearly flat on Tuesday, giving up earlier gains that had pushed the S&P 500 and Dow Industrial Average to record highs.
“The selloff in stocks intensified on Thursday as Wall Street got caught up in speculation about whether or not President Joe Biden will stay in the race for the White House,” said Deepak Jasani, Head of Retail Research at HDFC Securities. “A shakeup of the Democratic ticket could make investors more uncertain about the election outcome.”
The market is widely expecting the Fed to cut interest rates for the first time in 4.5 years. Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd., noted, “All eyes are on whether the Federal Reserve will cut rates by 25 or 50 basis points.”
Investors are pricing in a 93.5 per cent chance of a quarter-percentage point cut in September, according to the CME FedWatch Tool. The decision is expected to be announced at 11.30 pm IST, with Fed Chairman Jerome Powell’s press conference at 2.30 pm EST closely watched for further insights.
In the domestic market, technology stocks faced significant selling pressure in early trade. Tech Mahindra (-2.39 per cent), Wipro (-2.26 per cent), Infosys (-2.16 per cent), LTIMindtree (-2.01 per cent), and TCS (-1.88 per cent) were among the top losers on the NSE at 9.30 am.
On the other hand, financial stocks showed strength, with Bajaj Finance (2.13 per cent), Shriram Finance (1.94 per cent), and Bajaj Finserv (0.96 per cent) leading the gainers. Hero Motocorp (1.76 per cent) and ITC (0.67 per cent) also posted gains.
The broader market sentiment remained cautiously optimistic. Vikas Jain, Head of Research at Reliance Securities, commented, “Nifty continued to hold above 25,350 levels and crossed above psychological level of 25,400 mark which implies bullish trend in the market.”
Foreign Institutional Investors (FIIs) bought shares worth ₹482.69 crore on September 17, while Domestic Institutional Investors purchased ₹874.15 crore worth of equities.
In the commodities market, gold prices edged higher after slipping from a record high on Monday. Rahul Kalantri, VP Commodities at Mehta Equities Ltd., stated, “Gold has support at $2,555-2,540, with resistance at $2,590-2,612.”
Crude oil prices gained amid supply disruptions caused by Hurricane Francine and renewed tensions in the Middle East. “We expect crude oil prices to remain volatile in today’s session,” Kalantri added.
The Indian rupee opened slightly weaker against the U.S. dollar, reflecting the cautious mood ahead of the Fed decision.
As the market navigates through this crucial week, analysts advise investors to remain vigilant. Ameya Ranadive, Sr Technical Analyst at StoxBox, suggested, “A definitive close above 25,450 is expected to provide the index with a directional bias, with immediate support anticipated near 25,290.”
With the Fed’s decision looming and global uncertainties persisting, market participants are bracing for potential volatility in the coming days. The outcome of the rate decision and subsequent commentary from Fed officials will likely set the tone for market movements in the near term.