Indian stocks likely to open flat ahead of Fed rate decision

India’s equity benchmarks are set for a muted start on Wednesday, mirroring Asian peers, as investors await the U.S. Federal Reserve’s rate decision later in the day.

The Gift Nifty futures were trading at 25,909 points as of 7:53 a.m. IST, indicating that the benchmark Nifty 50 will open near Tuesday’s close of 25,839.65.

MSCI’s broadest index for Asia Pacific stocks outside Japan fell 0.2% on the day, while the dollar and Treasury yields rose on Tuesday.

The Fed is widely expected to cut rates at its ongoing meeting, but investors expect policymakers to remain divided.

“GIFT Nifty is indicating a flat start (for Indian equities), reflecting defensive positioning as event risk dominates sentiment,” said Ponmudi R, chief executive officer at Enrich Money.

The Nifty 50 and Sensex have lost about 1.2% each so far this week on persistent foreign selling amid Fed caution and lingering uncertainty over a U.S. trade deal.

Both indexes are about 1.8% below their respective lifetime highs touched earlier this month.

Foreign portfolio investors sold Indian shares worth 37.6 billion rupees ($418.2 million) on Tuesday, provisional data showed.

They have pulled out $1.3 billion so far in December, pushing their year-to-date selling to $17.7 billion, per National Securities Depository Limited data.