BENGALURU: Indian shares are set to open little changed on Wednesday and are expected to tread water through the session ahead of the US Federal Reserve’s rate decision and commentary.
The GIFT Nifty was at 25,470 points as of 08:08 a.m. IST, indicating the NSE Nifty 50 will open near its close of 25,418.55 on Tuesday.
Asian markets were also muted.
Indian shares hold near record highs ahead of Fed policy decision
The Indian benchmark was little changed in the previous session too, holding fort near record-high levels, with traders expecting the tentativeness to prevail ahead of the Fed policy decision, due after the Indian markets close.
While the Fed is widely expected to lower rates, the size of the cut – 25 basis points or 50 bps – is still uncertain.
The odds of a 50-bps cut have climbed to 65% from 34% last week.
While a bigger rate cut boosts the likelihood of foreign investors shifting funds to emerging markets such as India in search of higher returns, it has also prompted fears that the Fed may have delayed the start of its easing cycle a little too long, at the cost of economic growth.
The Fed’s reason for its decision and its commentary on future policy will influence the near-term trajectory of Indian equities in terms of foreign inflows and the outlook for US-dependent sectors such as IT and pharma, three analysts said.
Both foreign and domestic institutional investors were net buyers of Indian stocks on Tuesday, purchasing a net of 4.83 billion rupees ($58 million) and 8.74 billion rupees, worth of shares, respectively.
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