Indian Stock Indices Climb Amid US Fed Meeting Anticipation

Indian stock indices closed marginally up on Tuesday after reaching new highs. The market remained cautious ahead of the critical US Federal Reserve monetary policy meeting. Sectoral indices saw notable gains in realty and consumer durables, bolstered by positive institutional flows and foreign investments.

Indian stock indices closed slightly higher on Tuesday, touching fresh highs during the session but remaining largely muted as markets awaited the critical US Federal Reserve monetary policy meeting. The Sensex concluded at 83,079.66 points, marking an increase of 90.88 points or 0.11%, while the Nifty ended at 25,418.55 points, rising by 34.80 points or 0.14%. Sectoral indices such as realty and consumer durables were among the top movers.

"The Indian market exhibited a subtle positive momentum, driven by the anticipation of a rate cut cycle by the US Fed. Although a 25-bps cut is largely factored in, the market remains attuned to the Fed's comments on the economy and the future trajectory of rate cuts," stated Vinod Nair, Head of Research at Geojit Financial Services. Nair added that robust institutional flows continued to support the domestic market, with notable buying interest in large-cap stocks, particularly in IT, FMCG, and private banks.

Domestic stock indices have been rising significantly recently, reflecting the inherent strength of India's market fundamentals. Continued buying by foreign portfolio investors (FPIs) has also supported the stock indices. FPIs have purchased stocks worth Rs 27,856 crore in India in September, marking the fourth consecutive month of net buying. Investors are looking for fresh cues from the upcoming US monetary policy review meeting later this week to assess the extent of the anticipated interest rate cut.

The US Federal Reserve's monetary policy meeting is scheduled for September 17-18. Recently, Fed Chair Jerome Powell indicated at the Jackson Hole Symposium that it was time for the central bank to reduce interest rates as inflation aligns with its target but did not specify the magnitude of the cut. While a policy easing appears likely, investors are closely monitoring whether the cut will be shallow or deep.

Domestically, market participants also took note of inflation data, which has remained at comfortable levels in August.

(With inputs from agencies.)