Indian Markets Hold Steady Ahead of Fed Rate Cut Decision

Indian stock indices opened flat on Wednesday amid anticipation of the Federal Reserve's rate cut announcement. Despite cautious trading, retail sales data from the US showed positive signs, nudging market experts towards expecting a significant rate cut. Mixed performance seen across sectors on NSE.

Indian markets remain in a cautious mode as the Federal Reserve's rate cut announcement is expected tonight. Both Nifty and Sensex opened flat on Wednesday with slight declines, with the Nifty 50 index starting at 25,402.40 points, down by 16.15 points or 0.06 percent, and Sensex dipping by 42.53 points or 0.05 percent to 83,037.13 points.

Experts suggest that signs point towards a 50 basis points (bps) cut ahead of the Fed's announcement late Wednesday night Indian time. Recent US retail sales data has shown positive trends, further setting the stage for the FOMC meeting's outcome. 'US Retail Sales data for August were better than expected, and July figures were revised upwards. These developments set the stage for tonight's FOMC meet. Markets are positioned for a 50 bps rate cut, though we favor a 25 bps cut to commence the first rate cuts since March 2020's emergency measures,' said Ajay Bagga, Banking and Market Expert.

Bagga added that Indian markets are approaching the Fed rate cuts near all-time highs, indicating a market ready to absorb the event and potentially move higher. Across the National Stock Exchange, all broad market indices opened in green except for Nifty 100, Nifty 200, Nifty Midcap, and Nifty 50.

Sector-wise on NSE, Nifty Bank, Nifty Auto, Nifty Metal, and Nifty Media experienced pressure, while Nifty FMCG and Nifty Pharma showed marginal gains. 'Markets are directionless as they await the Fed's guidance. A 50 bps rate cut is expected to elicit a strong positive response, while a 25 bps cut has already been priced in. Interest rate-sensitive sectors would benefit from a significant rate cut, which might compel the Reserve Bank of India to follow suit,' said Market Expert Vijay Chopra.

Bajaj Housing Finance shares rose by more than 2 percent after a marginal early decline, trading at Rs 184. Major Asian markets traded positively, excluding Taiwan's flat index. Japan's Nikkei 225 gained 0.71 percent, and Indonesia's Jakarta Composite saw a marginal increase of 0.11 percent. South Korea and Hong Kong markets were closed. (ANI)

(With inputs from agencies.)