Stock markets opened lower on Wednesday, driven by investor caution ahead of the crucial U.S. Federal Reserve policy announcement and continued selling by foreign institutional investors (FIIs). The Sensex opened slightly lower at 80,666.26 from its previous close of 80,684.45 but has risen to 80,835.30 as of 9.45 AM, gaining 150.85 points or 0.19 per cent. The Nifty opened at 24,297.95 compared to its previous close of 24,336.00 and is now trading at 24,378.95, up by 42.95 points or 0.18 per cent.
The primary focus remains on the Federal Open Market Committee’s interest rate decision, with markets widely anticipating a 25-basis-point rate cut. “All eyes are on the Summary of Economic Projections for clues about future monetary policy,” said Prashanth Tapse from Mehta Equities Ltd. The potential implications of this decision have created significant market uncertainty.
At 9:30 AM, Nifty 50 saw Dr Reddy’s leading the gainers with a rise of 1.78 per cent, followed by Sun Pharma at 1.15 per cent, Cipla at 1.05 per cent, Shriram Finance at 1.03 per cent, and Wipro up by 0.96 per cent. On the losing side, Tata Motors was the biggest drag, slipping 2.42 per cent, while Power Grid and L&T dropped 1.50 per cent and 1.45 per cent, respectively. BEL declined by 1.24 per cent, and Adani Ports was down 1.01 per cent.
Foreign institutional investors continued their aggressive selling, offloading equities worth approximately ₹6,500 crore on Tuesday. “The near-term market construct has turned weak with FIIs turning sellers on rallies,” explained Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He highlighted the performance disparity, noting that while the S&P 500 is up 27.5 per cent year-to-date, the Nifty has only gained 12 per cent.
Sectoral performance showed mixed trends, with specific sectors drawing attention. Hotel stocks are expected to perform well due to optimistic wedding season demand and conference activities. Real estate stocks are likely to maintain momentum, supported by robust demand and solid quarterly results. Sugar stocks are under scrutiny following a 17 per cent decline in production.
Technical analysts provide cautionary insights into market movements. Shrikant Chouhan from Kotak Securities warned, “The market sentiment is weak, and the intensity of sell-off may increase if the market falls below 24,275.” He suggested that a potential decline could push the Nifty towards 24,000 levels.
Derivative analyst Hardik Matalia from Choice Broking noted critical support and resistance levels. “The Nifty can find support at 24,200, followed by 24,000 and 23,900. On the higher side, 24,500 can be an immediate resistance,” he stated.
Global market dynamics are also influencing investor sentiment. U.S. stocks experienced their longest losing streak since 1978, with the Dow Jones falling for nine consecutive sessions. Asian markets showed mixed trends, reflecting the complex global economic landscape.
Commodity markets also reflected the prevailing uncertainty. Brent crude oil futures edged slightly higher at $73.22, while gold prices slipped as traders awaited central bank decisions.
Individual stock movements will be crucial. Companies like ITC, with its potential hotel business demerger, and Vishal Mega Mart’s market debut are attracting investor attention. Several ADRs including HDFC Bank, Axis Bank, Reliance Industries, ICICI Bank, and SBI have seen declines between 1-2 per cent.
“Traders are advised to remain cautious, use strict stop-loss strategies, and avoid carrying long positions overnight to mitigate risks,” recommended Hardik Matalia, emphasizing the current market volatility.
The market’s direction will heavily depend on the Federal Reserve’s commentary and economic projections, with investors keenly watching for insights into potential rate cuts in 2025.
