Nifty, Sensex fall ahead of Fed policy decision

Indian equity benchmarks hit new highs on Wednesday, but ended the session on a negative note as market sentiment was overshadowed by the upcoming Federal Reserve interest rate announcement later in the day. At close, the Sensex was down 131.43 points or 0.16 percent at 82,948.23, and the Nifty was down 41.00 points or 0.16 percent at 25,377.55.
Bajaj Finance, Shriram Finance, Bajaj Finserv, ICICI Bank and Nestle India were the top gainers on the Nifty,while losers included TCS, HCL Technologies, Infosys, Tech Mahindra and Wipro.
On the sectoral front,except bank, all other sectoral indices ended in the red with IT index shedding more than 3 percent, while auto, pharma, metal, oil & gas indices were down 0.5-1 percent.The BSE midcap index shed 0.7 percent and smallcap index was down 0.5 percent.
Meanwhile,following a sluggish start, the market made a remarkable recovery, reaching new record highs driven by strong performance in banking stocks. However, this rally was short-lived, as selling pressure across most sectors led to a negative close. While the Federal Reserve is anticipated to cut rates, uncertainty remains regarding the magnitude of the reduction—whether it will be 25 or 50 basis points. The Fed's rationale and future policy guidance will play a crucial role in shaping the near-term outlook for Indian equities, particularly influencing foreign investment flows and the performance of IT and pharmaceutical sectors, noted analysts.
Rupee Close:
The Indian rupee climbed to its highest level in over one month on Tuesday, lifted by rising expectations that the U.S. Federal Reserve will kick off policy easing with a 50 basis points rate cut this week.The rupee closed at 83.75 against the U.S. dollar on September 17,up 0.1% from its close at 83.8875 on Monday.
According to information, the Reserve Bank of India (RBI) has announced that there will be no trading activities in various financial markets, including government securities, foreign exchange, money markets, and rupee interest rate derivatives, on September 18, 2024.
Trading Guide:
Vinod Nair, Head of Research, Geojit Financial Services reportedly quoted as saying,the Indian market experienced a minor profit booking with underperformance by midcaps. Mixed signals from global markets emerged ahead of the anticipated FOMC rate cut decision which is seemingly priced in a 25-bps cut. Investors assess the potential for a short-term underperformance of equity given the elevated valuation and correction of metal prices.Commodities, including oil prices, are steadily declining, suggesting a potential tempering of economic growth. Investor caution is evident as gold prices rise, likely due to anticipated dollar weakness following the rate cut.
Market experts have recommended five stocks to buy for today- Gravita India Ltd, Arvind Fashions , GAIL India Ltd, Birlasoft Ltd and Dr Reddy's Laboratories Ltd.

(Writer is a Finance Research Analyst, based in Gandhinagar, Gujarat)