Sensex trades flat ahead of US Fed meeting

IT stocks drag Sensex, Nifty lower ahead of Fed meet outcome

Indian equity indices opened flat on Wednesday as global markets displayed a mixed trend ahead of the US Federal Reserve’s monetary policy decision later in the day.

As of 9:42 a.m., the BSE Sensex was up by 38 points, or 0.05%, trading at 83,117, while the Nifty 50 gained 10 points, also a 0.05% increase, to reach 25,430.

In early trading, banking stocks led the market, with the Nifty Bank index rising by 237 points, or 0.45%, to 52,424. Midcap and smallcap stocks remained relatively unchanged, with the Nifty midcap 100 index dipping by 6 points to 60,174, while the Nifty smallcap 100 index climbed by 66 points, or 0.34%, to 19,531.

Sector-wise, notable gainers included the Auto, PSU Bank, financial services, FMCG, energy, infrastructure, and private banking sectors. Conversely, IT, pharma, metals, and real estate lagged.

Within the Sensex, top gainers included Bajaj Finance, Bajaj Finserv, UltraTech Cement, State Bank of India, Power Grid, ITC, HDFC Bank, IndusInd Bank, Tata Motors, and Kotak Mahindra Bank. On the downside, Tech Mahindra, Infosys, TCS, Wipro, HCL Tech, Asian Paints, Sun Pharma, Tata Steel, and Bharti Airtel were among the top losers.

Market experts noted the significance of the Fed’s rate decision, highlighting a cautious sentiment in global markets. They suggested that an ideal scenario would involve a 25-basis point rate cut coupled with a dovish commentary signaling potential future cuts. Positive retail sales data alongside a weakening labor market supports this possibility.

Investors were advised that the current environment favors reducing exposure to mid and small-cap stocks while increasing investment in large-cap stocks for better medium- to long-term returns.

Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs) purchased shares worth a net of Rs.482.69 crore, while Domestic Institutional Investors (DIIs) bought shares worth Rs.874.15 crore on September 17.

On Tuesday, domestic equity indices closed with marginal gains, with the Nifty settling above the 25,400 mark after hitting a low of 25,352 earlier in the day. The Sensex rose by 90.88 points, or 0.11%, to 83,079, and the Nifty increased by 34.80 points, or 0.14%, to close at 25,418.55.

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