Indian stocks are likely to open flat on Wednesday, as investors remained cautious ahead of the US Federal Reserve’s policy decision, which will be closely analyzed for indications of its future rate-cut strategy.
The Gift Nifty futures were trading at 24,359, as of 7:47 a.m. IST, indicating that the benchmark Nifty 50 will open near Tuesday’s close of 24,336.
The Nifty 50 and the BSE Sensex slumped on Tuesday, as foreign investors sold off Indian stocks, bringing the benchmarks’ losses for the week to around 1.8% each.
Foreign investors net offloaded Indian stocks worth about 64.1 billion rupees ($755 million), according to an exchange data released after market close.
Investors remain on the sidelines ahead of the US central bank’s policy decision later in the day.
While a 25-basis-point rate reduction is factored in, much of the focus will be on Fed Chair Jerome Powell’s commentary about future cuts, analysts said.
Indian shares slump on caution before Fed meeting
Indian IT stocks, which are highly sensitive to US interest rates due to their significant revenue from the world’s largest economy, have dropped 1.3% so far this week ahead of the Fed’s policy decision.
While a quarter-point cut is near-imminent on Wednesday, sticky inflation and a relatively strong US economy have made Fed’s rate-cut path for next year less certain.
Wall Street equities closed lower overnight.
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