Rush to book profit on Indian markets ahead of Fed decision on interest

MUMBAI: A rush to book profits ahead of the US Federal Reserve’s interest rate decision today weighed on Indian markets, dragging the benchmark indices lower on Wednesday.

The BSE Sensex dropped 131.43 points or 0.16 per cent to settle at 82,948.23, while the NSE Nifty declined 41 points or 0.16 per cent to close at 25,377.55, after both indices hit fresh record highs during early trade.

Caution on IT sector

The markets saw investors, particularly in the IT sector, take a cautious stance. Shares of Tata Consultancy Services (TCS) and HCL Technologies dropped over 3 per cent, while Infosys, Tech Mahindra, and Tata Motors were among other notable laggards.

Early gains

Despite early gains, where Sensex touched an all-time intraday high of 83,326.38, and Nifty reached a peak of 25,482.20, the pressure from profit-booking outweighed the morning’s bullish momentum.

On the flip side, Bajaj Finance, Bajaj Finserv, Nestle, HDFC Bank, and ICICI Bank emerged as top gainers, tempering some of the market’s losses.

Overseas markets

In the global context, Tokyo and Shanghai markets closed higher, whereas European markets traded lower and US markets ended on a mixed note on Tuesday.

This points to the caution ahead of the anticipated Federal Open Market Committee (FOMC) rate cut decision.

Vinod Nair, Head of Research at Geojit Financial Services, pointed out that “the market experienced minor profit-booking, with underperformance by midcaps, as mixed signals from global markets emerged ahead of the anticipated Fed rate cut, which seems priced in as a 25-basis point reduction.”

Net purchases by FIIs

Foreign Institutional Investors (FIIs) continued to buy, recording net purchases worth Rs482.69 crore on Tuesday.

Meanwhile, Brent crude dropped 1.63 per cent to $72.50 per barrel, adding some context to the global market volatility.

This decline comes after a record-setting day on Tuesday, where the Sensex climbed 90.88 points to reach 83,079.66, while the Nifty settled at 25,418.55.