Indian stock markets had a quiet start on Wednesday as investors awaited the outcome of the US Federal Reserve’s policy decision later in the day. Inflation in the US had eased to a more than two-year low in May, leading to speculation that the Federal Reserve might hold off on raising interest rates.
At around 9.23 am, the BSE Sensex was slightly up by 13 points or 0.02%, trading at 63,156. The Nifty50 was also marginally up by 7 points or 0.04%, reaching 18,723.
Among the Sensex stocks, Tata Steel, Tata Motors, Power Grid, Titan, Nestle, and Maruti started the day with gains, while HUL, Bharti Airtel, Tech Mahindra, Bajaj Finserv, Infosys, and TCS opened with losses.
Anupam Rasayan shares saw a nearly 6% rise after the company signed a letter of intent worth $265 million with a Japanese specialty chemical firm. Conversely, shares of Nazara Technologies opened lower after Europe-based financial services group Societe Generale offloaded 400,000 shares at Rs 681.74 apiece.
In terms of sectors, Nifty Metal experienced a surge of 1.45%, and Nifty PSU Bank rose by 0.33%. However, sectors such as financial, FMCG, IT, pharma, and healthcare started the day with losses. In the broader market, Nifty Midcap 100 rose by 0.05%, and Nifty Smallcap 100 gained 0.26%.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the market momentum, stating that it had the potential to drive the Nifty to a new record high, which is only 172 points away. He emphasized the global support from the US market and strong domestic macros as contributing factors to this potential record.
Vijayakumar added, “Even though US CPI inflation has declined to 4%, the core inflation, which is more significant, is stuck at around 5%. Therefore, the Fed is likely to sound hawkish even while pausing rates today.”
Aditya Gaggar, Director of Progressive Shares, noted that after a DOJI formation, Nifty50 had formed a strong candle, indicating a reversal of the trend. Gaggar believed that the ongoing rally could surpass its immediate hurdle of 18,780 and reach record levels of 18,880, with downside protection at 18,560.
In global markets, Wall Street stocks rallied on Tuesday following data showing a cooling in US inflation, raising expectations of a benign outcome from the upcoming Federal Reserve monetary decision. The Dow Jones Industrial Average rose by 0.4%, the S&P 500 advanced by 0.7%, and the Nasdaq Composite Index jumped by 0.8%.
Asian shares also saw gains on Wednesday, with Tokyo’s Nikkei rising 1.26% to reach a fresh 33-year high. China’s Shanghai Composite rose by 0.24%, while Korea’s Kospi declined by 0.49%.
In terms of foreign institutional investments, provisional NSE data indicated that foreign institutional investors bought Indian equities worth Rs 1,678 crore on a net basis on Tuesday, while domestic investors sold shares worth Rs 203 crore.
Oil prices dipped slightly on Wednesday as industry data revealed an unexpected increase in US crude stocks, adding to concerns about weak demand amid worries of a recession and disappointing Chinese economic data. Brent crude futures fell by 27 cents or 0.4% to reach $74.01 a barrel, while US West Texas Intermediate (WTI) crude stood at $69.13 a barrel, down 29 cents or 0.4%.
The Indian rupee weakened by 3 paise against the US dollar in early trade, reaching $82.28. The dollar index, which measures the greenback’s performance against a basket of six major world currencies, declined by 0.02% to reach the 103.31 level.
