BENGALURU, Sept 17 (Askume) – Indian shares remained near record highs on Tuesday as traders expected little change ahead of the Federal Reserve cutting interest rates a day later.
As of 10:16 am, the Nifty 50 index (.NSEI) was down 0.05% at 25,371.2, while the S&P BSE Sensex (.BSESN) was down 0.06% at 82,939.94. These hit record highs on Monday.
Although the Fed is widely expected to cut interest rates after markets close in India on Wednesday, there is still uncertainty over the extent of the cut – 25 basis points or 50 basis points.
“The market is in a wait and watch mode and the Fed is expected to take interest rate action tomorrow,” said VK Vijayakumar, chief investment strategist, Geojit Financial Services.
The probability of a rate cut has recently risen by 50 basis points to 67% from 50% last week, raising the possibility that foreign investors will move funds to emerging markets like India in search of higher returns.
However, the prospect of a sharp rate cut has also raised concerns that the Fed may be late in beginning its easing cycle.
“A rate cut is positive for the market. But if this rate cut is due to a sharp slowdown in the US economy, the market is unlikely to see it as positive,” Vijayakumar said.
Ten of the 13 major sectors declined on the day, while small-caps (.NIFSMCP100) and mid-caps (.NIFMDCP100) declined 0.5-0.5% each.
Consumer stocks (.NIFTYFMCG), which have fallen 1.4% in the last two sessions, rose 0.3% today.
Among stocks, Bajaj Housing Finance (BAJO.NS) rose 8%, with the housing finance company surging 136% in early trade on Monday.
Shares of electric scooter maker Ola Electric (OLAE.NS) rose 4% after BofA Securities and Goldman Sachs initiated a “buy” rating .
Panacea Biotec (PNCA.NS) rose 5% after it settled a marketing-related patent infringement case with Sanofi India .
Torrent Power shares rose 5% after it struck a deal to build solar, wind or solar-wind hybrid projects.
