Sensex drops 100 points ahead of US Fed outcome

Benchmark indices continue to trade in a narrow range with negative bias as investors are keenly awaiting the outcome of US Federal Reserve meet. The Fed is expected to raise interest rates for only the second time in a decade amid recent data suggesting the US recovery is gaining traction.

At 15:15 pm, the S&P BSE Sensex was trading at 26,575, down 123 points, while the broader Nifty50 was quoting 46 points down at 8,176. In broader markets, BSE Midcap was down 0.2% while the Smallcap index gained 0.03%.

“Upsides are likely if the Nifty can convincingly move above the immediate resistances of 8,229. Crucial supports to watch for any weakness are at 8,185,” says Subash Gangadharan - Derivatives Analyst, HDFC Securities.

On the macro front, data released by the government after market hours yesterday, showed that the all-India general CPI inflation dipped to 24-months low of 3.63% in November 2016 compared with 4.2% in October 2016.

Among overseas markets, Asia shares crept cautiously higher on Wednesday while a hush settled on the US dollar as investors felt certain the Federal Reserve would raise rates for the first time in a year, but were less sure what it might herald for 2017.

Australia led the going early with a gain of 0.8%, though MSCI's broadest index of Asia-Pacific shares outside Japan could only manage a 0.1% rise. Japan's Nikkei and Shanghai stocks both dithered either side of flat, as did much of the region.

Back home, Axis Bank, RIL, Asian Paints, Tata Motors and Wipro are up 1%-3%. Coal India, Cipla, HDFC, ONGC and Hero MotoCorp are down 1%-3%.

Among other shares, Wockhardt was up 4% at Rs 719 on the BSE after the company on Tuesday after market hours said the UK health regulator has confirmed that its Daman-based manufacturing facility complies with good manufacturing practices (GMP).

Mandhana Retail Ventures is locked in upper circuit of 5% at Rs 227 on the BSE on the first day of its listing after demerger from Mandhana Industries. On the National Stock Exchange (NSE), the stock locked at upper price band of Rs 224.

Hindustan Construction Company (HCC) surged 11% to Rs 43.50, also its 52-week high on the BSE in intra-day trade, after the company said it will next month seek shareholders' nod for conversion of loan into equity shares or optionally convertible debentures pursuant to implementation of the Reserve Bank of India’s (RBI) scheme for sustainable structuring of stressed assets.


With Reuters inputs