Indices trade flat after negative start as investors brace for Fed's policy outcome

Indian markets made negative start on Wednesday tracking mixed cues from Asian counterparts as investors await the Federal Reserve's interest-rate decision later in the day for directional cues. The U.S. central bank is widely expected to cut interest rates by 25 basis points but the focus will be on the release of Summary of Economic Projections, which will unveil the U.S. Fed dot plot. Sensex and Nifty soon turned volatile and are trading flat in early deals as investor prefers to stay sidelines. Foreign fund outflows also dented sentiments. Foreign institutional investors (FIIs) extended their selling as they sold equities worth Rs 6,409 crore on December 17. However, fall in crude oil prices overnight lend some support to domestic sentiments. Oil prices slid amid renewed demand worries in the wake of economic data from Germany and China. Some support also came as Finance Minister Nirmala Sitharaman said the lower-than-expected GDP growth of 5.4 per cent in the second quarter was a temporary blip and the economy will see healthy growth in the coming quarters. 

On the sectoral front, sugar stocks are in focus as industry body ISMA said sugar production declined 17 per cent to 61.39 lakh tonnes till December 15 of the current marketing year that started in October as against 74.05 lakh tonnes in the corresponding period of the preceding year, mainly due to fall in output in Maharashtra. In stock specific development, Aditya Birla Real Estate gained as its arm acquires Rs 104 rore land in Boisar.

The BSE Sensex is currently trading at 80654.64, down by 29.81 points or 0.04% after trading in a range of 80496.57 and 80868.02. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.09%, while Small cap index was down by 0.17%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.80%, Telecom up by 0.38%, IT up by 0.29%, TECK up by 0.26% and Basic Materials up by 0.16%, while Utilities down by 1.11%, Power down by 1.06%, Capital Goods down by 0.88%, PSU down by 0.77% and Industrials down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.68%, Reliance Industries up by 0.74%, Hindustan Unilever up by 0.67%, HCL Technologies up by 0.64% and Asian Paints up by 0.60%. On the flip side, Tata Motors down by 2.03%, Power Grid down by 1.65%, Larsen & Toubro down by 0.80%, Adani Ports & SEZ down by 0.78% and NTPC down by 0.74% were the top losers.

Meanwhile, expressing optimism over India’s growth prospects, Finance Minister Nirmala Sitharaman has said the lower-than-expected Gross Domestic Product (GDP) growth of 5.4 per cent in the second quarter (Q2) was a ‘temporary blip’ and the economy will see healthy growth in the coming quarters. She said India has seen ‘steady and sustained’ growth and its GDP growth rate has averaged 8.3 per cent in the last three years.

She added India continues to be the fastest-growing major economy in the world. She further said there is no broad-based slowdown in the manufacturing sector. Half of the sectors within the overall manufacturing basket continue to remain strong. The Indian economy grew 6.7 per cent in the first (April-June) quarter and 5.4 per cent in the July-September period. 

About inflation, Sitharaman said it is better controlled in the NDA regime, whereas under the UPA, it touched double digits. She noted that retail inflation in April-October 2024-25 stood at 4.8 per cent, the lowest since the Covid pandemic. She said the unemployment rate has come down from 6 per cent in 2017-18 to 3.2 per cent now.

The CNX Nifty is currently trading at 24339.60, up by 3.60 points or 0.01% after trading in a range of 24273.10 and 24394.45. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 2.27%, Sun Pharma up by 1.72%, Cipla up by 1.37%, Tata Consumer Products up by 1.15% and Eicher Motors up by 0.93%. On the flip side, Tata Motors down by 2.11%, Power Grid down by 1.56%, Bharat Electronics down by 0.87%, Larsen & Toubro down by 0.78% and Maruti Suzuki down by 0.77% were the top losers.

Asian markets are trading mixed; Hang Seng jumped 114.82 points or 0.58% to 19,815.30, Shanghai Composite strengthened 24.15 points or 0.71% to 3,385.64, KOSPI increased 22.69 points or 0.92% to 2,479.50 and Taiwan Weighted added 3.25 points or 0.01% to 23,021.26. On the other hand, Nikkei 225 slipped 207.68 points or 0.53% to 39,157.00, Jakarta Composite fell 33 points or 0.46% to 7,124.73 and Straits Times was down by 15.56 points or 0.41% to 3,784.37.