BENGALURU: India’s blue-chips treaded water on Wednesday, hovering around five-week lows hit in the previous session, ahead of the much-anticipated U.S. Federal Reserve’s interest rate decision and commentary later in the day.
The blue-chip NSE Nifty 50 index added 0.10% to 21,839.10, while the BSE Sensex gained 0.12% to 72,101.69.
Both the indexes swung between gains of 0.6% and losses of 0.3% during the session, before settling flat.
Markets are in a wait-and-watch mode and have not yet priced in the possibility of a reduction in the number and quantum of U.S. rate cuts in 2024, said Narendra Solanki, head of equity research at Anand Rathi.
While the Fed is expected to keep rates unchanged, any hawkish comments from Chair Jerome Powell hinting at a delay in the onset of rate cuts could weigh as markets anticipate rate cuts beginning from June.
U.S.-rate sensitive IT stocks, which dropped about 3% on Tuesday, shed another 0.18%. Financial stocks, the highest-weighted sector, fell 0.28%.
Indian blue-chip shares slip to 5-week low ahead of US rate decision; IT leads losses
Auto stocks added 0.26%, led by a 4.22% rise in Eicher Motors after UBS upgraded the motorcycle maker’s shares, citing likely gains from new Royal Enfield models and attractive valuations.
Eicher was the top Nifty 50 gainer, followed by Maruti Suzuki, which gained about 3% and hit a record high.
Energy and oil & gas added about 1% and 1.3%, respectively, led by a rebound in Reliance Industries and oil marketing companies after a sharp drop in the previous session.
Reliance, BPCL, HPCL and IOC gained between 1.3% and 2.5%. They had lost between 1%-4.3% on Tuesday.
Tata Steel and Hindalco Industries fell 2.08% and 1.35%, respectively, following a drop in global metal prices and a rise in the U.S. dollar.
Small-caps and mid-caps were little changed. So far in March, they are down about 8.65% and 5%, respectively, compared to a 0.65% drop in the Nifty 50, on concerns of elevated valuations.
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