Markets Hover as Investors Await Fed Rate Decision

BSE Sensex and Nifty 50 closed flat on Wednesday, with investors anticipating the US Federal Reserve's rate decision. Financial stocks gained, while tech saw losses. Analysts suggest market remains bullish despite caution advised due to overbought signals.

The BSE Sensex and Nifty 50 indices concluded Wednesday's session on a flat note, as investors eagerly awaited the US Federal Reserve's decision on a potential rate cut. The NSE Nifty50 settled at 25,377.55, down 41 points or 0.16%, after touching an intraday high of 25,482.20. Similarly, the BSE Sensex closed at 82,948.23, down 131.43 points or 0.16%, having peaked at 83,326.38 earlier in the session.

The Federal Reserve's policy committee began its meeting, with a decision on the rate cut expected to be announced later. During trading hours, Shriram Finance, Bajaj Finance, Bajaj Finserv, Nestle India, and ICICI Bank stocks were notable gainers.

On the flip side, TCS, HCL Technologies, Infosys, Tech Mahindra, and Wipro were among the major losers. The banking and financial services sector saw significant gains, driven by hopes of a rate cut that could enhance revenue, although PSU Banks traded with muted gains.

"Benchmark indices Nifty and Sensex reached new all-time highs today but failed to sustain those levels, forming a 'High Wave' candlestick pattern on the daily timeframe. Nonetheless, the broader trend remains bullish," said VLA Ambala, SEBI Registered Research Analyst and Co-Founder of Stock Market Today. "The market is in an overbought zone, with Nifty RSI above 80 on the monthly chart and 70 weekly, warranting caution. This rare combination of all-time highs in both the stock market and gold usually offers protection against market fluctuations, highlighting global geopolitical tensions and recession threats," she added.

"A breakout above 25,500 could indicate further upward momentum, while a drop below 25,200 may trigger profit-taking and potentially find support at the 25,000 level," noted Varun Aggarwal, MD of Profit Idea. In commodities, gold prices remained steady amidst rising dollar values and yields, following stronger-than-expected US retail sales data. Participants anticipate a potential 50-bps rate cut by the Fed, though any delays could adversely affect gold prices in the short term.

Asia-Pacific markets ended higher, buoyed by Wall Street's gains, with Japan's Nikkei 225 rising 0.49%. US stock futures were mixed, reflecting investor preparations for the Fed's interest rate decision, with a 63% chance of a 50-basis point cut. In energy markets, US crude oil rose 1.57% to USD 71.19 per barrel, and Brent oil gained 1.31% to USD 73.70. Spot gold fell 0.51% to USD 2,569.51 an ounce after hitting a record high earlier in the week.

(With inputs from agencies.)