Stock markets ended Wednesday’s trading session on a bearish note, with benchmark indices posting gains for a third straight day ahead of the US Federal Reserve’s crucial monetary policy meeting. The Sensex tumbled 502.25 points or 0.62 percent to close at 80,182.20, while the Nifty 50 fell 137.15 points or 0.56 percent to end at 24,198.85.
Market sentiment remained cautious, driven by multiple factors, including expected US monetary policy decisions, global economic uncertainties and domestic economic indicators. Highlighting the complex landscape of the market, Vinod Nair, head of research at Geojit Financial Services, said: “The Indian market experiences a collapse during the early Santa Claus rally, with the impact in India being greater than in developed markets due to the rapid appreciation of the dollar.”
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Sector performance showed a mixed but largely negative trend. While the Pharma index rose more than 1 percent, other sectors such as Media lost more than 2 percent. The biggest gainers included Trent (2.48 percent), Dr. Reddy’s (2.34 percent), Cipla (1.39 percent), Wipro (1 percent) and Reliance (0.73 percent). The biggest losers, on the other hand, were Tata Motors (-2.92 percent), Power Grid (-2.46 percent), BEL (-1.95 percent), NTPC (-1.83 percent) and JSW Steel (-1.77 percent).
Broader market indices also reflected the overall weakness. The Nifty Next 50 fell 1.30 per cent, the Nifty Midcap Select fell 0.45 per cent, the Nifty Bank fell 1.32 per cent and the Nifty Financial Services index fell 1.23 per cent.
The market breadth indicated significant selling pressure: 2,563 shares fell, while 1,442 rose. Notably, 246 stocks hit 52-week highs, while 38 hit 52-week lows.
Prashanth Tapse of Mehta Equities explained the market dynamics: “Investors shunned banking-led stocks ahead of the outcome of the US interest rate decision, focusing on the Fed chairman’s commentary on the inflation and growth outlook.”
The market’s technical landscape also signals continued caution. Shrikant Chouhan of Kotak Securities noted, “Technically, the market experienced selling pressure at higher levels… the Nifty Index closed below the 20-day SMA, which is largely negative for the short term.”
An interesting highlight of the day was the great performance of IPO debutants. Online payments company Mobikwik rose 89.25 percent, budget retailer Vishal Mega Mart rose 43.5 percent and drugmaker Sai Life Sciences rose 39.3 percent on their first day of trading.
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The Indian rupee continued its downward trajectory and hit a new low of 84.95 against the US dollar, further dampening market sentiment.
Investors are now closely watching the Federal Reserve’s monetary policy meeting, with expectations of possible rate cuts and insights into the economic outlook. Ameya Ranadive, senior technical analyst at StoxBox, emphasized: “Investors are expecting a 25 basis point rate cut today… the direction of the market will largely depend on the signals from the Fed.”
As markets await the Federal Reserve’s decision, traders and investors remain cautiously positioned, with the potential for significant market moves in the coming sessions.
