Equity benchmarks Sensex and Nifty opened on a cautious note on Wednesday, tracking tepid global cues ahead of the US Federal Reserve’s policy outcome.
After starting flat, the 30-share BSE index gained momentum and traded 128.84 points or 0.26 per cent higher at 50,492.80, and the broader NSE Nifty was up 30.50 points or 0.20 per cent at 14,940.95 during the early hours.
L&T was the top gainer in the Sensex pack, rising around 2 per cent, followed by HCL Tech, Tech Mahindra, HDFC Bank, TCS and M&M. Asian Paints, ONGC, NTPC and Nestle India were among the laggards.
In the previous session, Sensex ended 31.12 points or 0.06 per cent lower at 50,363.96, and Nifty slipped 19.05 points or 0.13 per cent to 14,910.45.
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Foreign institutional investors (FIIs) were net buyers in the capital market on Tuesday as they bought shares worth Rs 1,692.31 crore.
Binod Modi, who heads strategy at Reliance Securities, says domestic equities look to be flat to marginally good at the moment. “Clearly, mounting concerns with regards to higher inflation, bond yields and a recent spike in new Covid-19 cases in select states have weighed on investors’ sentiments,” he says.
“Outcome of Fed policy meeting will equally be important for domestic markets in the near term as this can potentially influence FPIs flows into equities and the rupee. However, India continues to remain the most preferred destination for investors on better growth prospects,” Modi says.
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US equities finished marginally lower ahead of the Fed meeting outcome. The two-day Fed meet kick-started on Tuesday. “Given a faster rollout of vaccination process with over 32 per cent of the US population vaccinated at-least first dose so far, and clearance of mega $1.9-trillion fiscal stimulus, a faster recovery in economic growth looks to be imminent. Hence, Fed’s earlier stance of not tweaking rates till 2023 might be changed,” Modi says.
Exchanges in Shanghai, Hong Kong, Tokyo and Seoul were trading on a negative note in mid-session deals. The global oil benchmark Brent crude was trading 0.23 per cent lower at $68.23 per barrel at the time of filing this story.
