Indian market opens flat, cautious ahead of Fed rate cut decision tonight

Mumbai (Maharashtra) [India], September 18 (ANI): Indian markets are in cautious mode as the Fed rate cut announcement will be made tonight, with both stock indices, Nifty and Sensex, opening flat on Wednesday with a marginal dip.

The Nifty 50 index opened at 25,402.40 points, with a decline of 16.15 points or 0.06 percent, while the BSE Sensex index was down by 42.53 points or 0.05 percent at 83,037.13 points.

Experts pointed out that the markets are showing signs of a 50 bps cut ahead of the Fed rate cut announcement on Wednesday late night India time. The recent retail sales data from the US also showed positive signs.

“US Retail Sales data for August came in better than expected and the July retail sales numbers were revised upwards as well. These positive moves are setting up the stage for the FOMC meet outcome tonight, India time. Markets positioning is leaning towards a 50 bps rate cut tonight. We still remain in favour of a 25 bps rate cut to start the first rate cuts in the US since the emergency rate cuts of March 2020,” said Ajay Bagga, Banking and Market Expert.

He further told ANI that “the good news is that Indian markets are going into the Fed rate cuts in a tight zone around all-time highs. Risk off has not set in, pointing to prospects of a market primed to take today’s event in its stride and to move up further.”.

In the broad market indices on the National Stock Exchange, except Nifty 100, Nifty 200, Nifty Midcap, and Nifty 50, all other indices opened in green.

In the sectoral indices on NSE, Nifty Bank, Nifty Auto, Nifty Metal, and Nifty Media faced pressure, while Nifty FMCG and Nifty Pharma surged marginally.

“The markets are currently lacking clear direction as they await guidance from the Federal Reserve. If the Fed announces a 50 basis points rate cut, it is expected to be met with a strong positive response from the markets. A 25 basis points cut, however, has already been factored in by investors. In the event of a significant rate cut, interest rate-sensitive sectors are likely to benefit. Moreover, if the Fed implements a deep cut, it is anticipated that the Reserve Bank of India (RBI) would follow suit” said Vijay Chopra, Market Expert.

The Bajaj Housing Finance share continues to gain after a marginal decline in opening in early trade on Wednesday, the stock trading at Rs 184 surging more than 2 per cent.

Major Asian markets were trading positively on Wednesday, except Taiwan’s index, which showed flat movement. Japan’s Nikkei 225 gained 0.71 per cent, and Indonesia’s Jakarta Composite was also in the green with a marginal surge of 0.11 percent. South Korea and Hong Kong’s markets were closed.