Nifty, Sensex, poised to open higher; eyes on Federal Reserve meeting

Stock market news: Benchmark indices, NSE Nifty 50 and S&P BSE Sensex are anticipated to start the trading day on an upward trajectory on Wednesday, rebounding from a recent dip to a five-week low, mirroring gains in Asian markets, while investors keep a keen watch on the US Federal Reserve's policy decision and accompanying remarks.

As of 08:30 am, the GIFT Nifty was trading 0.18 per cent up at 21,939.40, indicating an opening above the previous session's close of 21,817.45 for the Nifty 50.

In Tuesday's session, both the Nifty 50 and BSE Sensex experienced a downturn of about 1 per cent, with the information technology index witnessing a sharper decline of approximately 3 per cent, leading the market losses.

The correction trend extended to broader segments, particularly small-caps and mid-caps, amid concerns over stretched valuations. These segments recorded declines of 8.7 per cent and 5 per cent, respectively, in March, outpacing the 0.75 per cent drop observed in the Nifty 50.

Vinod Nair, Head of Research at Geojit Financial Services, attributed the correction in domestic markets to apprehensions surrounding inflated valuations and apprehensions of potential delays in rate cuts by the Federal Reserve, spurred by higher-than-anticipated inflation data.

On the global front, Asian markets commenced the day on a positive note, with the MSCI Asia ex-Japan index registering a gain of 0.35 per cent. Wall Street ended the previous session with gains.

All eyes are now on the Federal Reserve's upcoming meeting, with expectations leaning towards a decision to maintain interest rates unchanged. Market participants are keenly awaiting insights from the accompanying commentary, seeking cues on the future trajectory of US interest rates.

Speculations regarding the timing of the first rate cut by the Federal Reserve have been pushed back to June amid persistent inflationary pressures.

In Tuesday's trading session, foreign portfolio investors injected approximately Rs 1,421 crore into Indian equities on a net basis, while domestic institutional investors contributed a net Rs 7,450 crore to stock holdings.

Stocks to watch

• Ultratech Cement: The government announced that the competition watchdog has approved Ultratech's acquisition of Kesoram Cement business from Kesoram Industries.
• Aurobindo Pharma: The company has received approval from the US drug regulator for mometasone Furoate monohydrate nasal spray, used in the treatment of nasal allergies.
• Inox Green Energy: The company's unit has secured an order from NLC India for the restoration of 33 wind turbine generators.

(With Reuters inputs.)