Markets drift lower ahead of US Fed meet

Mumbai: Sliding for the fourth straight day, the BSE Sensex shed 152 points in choppy trade on Wednesday amid mixed global cues ahead of the US Federal Reserve's policy decision. The rupee tumbling to yet another lifetime low against the US dollar and unabated foreign capital outflows also weighed on the bourses, traders said.

The BSE benchmark oscillated between gains and losses in a range-bound session, before finally closing 152.18 points or 0.29 per cent lower at 52,541.39, an over 10-month low. The index has now lost 2,778.89 points in four days. Similarly, the broader NSE Nifty declined by 39.95 points or 0.25 per cent to end at 15,692.15.

"Equity markets traded nervously ahead of the US Fed meet outcome. While strength was seen in morning, selling pressure in the second half dragged the indices lower. All eyes would be on the US Fed meet outcome," said Ajit Mishra, V-P (research), Religare Broking Ltd. Globally, investors were awaiting the US Fed's policy decision later in the day amid expectations of an aggressive rate hike to tame red-hot inflation.

"Looming fears of stagflation and volatility ahead of the Fed meeting decision forced the market to close flat with a negative bias. The aggressive rate hike of 50-75 bps is mostly factored by the market but updated economic and interest rate forecasts to be detailed by the central bank will closely control the future trend," said Vinod Nair, head (research) at Geojit Financial Services.

Foreign institutional investors (FIIs) remained net sellers in the capital market as they sold shares worth Rs 4,502.25 crore on Tuesday, as per exchange data.

NTPC was the top laggard in the 30-share Sensex pack, declining 2.02 per cent, followed by Infosys, Reliance Industries, Wipro, HUL, Tech Mahindra, PowerGrid and ITC. On the other hand, Bajaj Finserv, Bajaj Finance, Tata Steel, Larsen & Toubro, SBI, Asian Paints and M&M were among the gainers, climbing as much as 4.24 per cent. Telecom stocks were largely flat, with the BSE Telecom index dipping 0.17 per cent, after the Union Cabinet approved the auction of 5G airwaves and gave its nod for setting up of captive 5G networks by big tech firms.

In the broader markets, the BSE midcap gauge gained 0.52 per cent and the smallcap index jumped 0.49 per cent. Among BSE sectoral indices, power fell the most by 0.91 per cent, followed by energy (0.82 per cent), oil & gas (0.81 per cent), utilities (0.79 per cent), teck (0.67 per cent) and realty (0.62 per cent). Auto, industrials, consumer discretionary goods & services and capital goods were among the gainers.