Nifty slips below 9,100 ahead of Fed outcome; IT stocks drag

The Nifty50 index had hit its all-time high in the previous session

The benchmark indices on Wednesday continued to trade flat tracking negative trend seen in Asian markets as investors awaited the outcome of US Federal Reserve's two-day policy meeting, which will conclude later in the day.

The Nifty50 index had logged its fresh all-time high of 9,123 in the previous session. 

At 11:11 am, the S&P BSE Sensex was trading at 29,440, down 3 points, while the broader Nifty50 was ruling at 9,090, up 3 points. 

In the broader market, the BSE Smallcap and BSE Midcap indices outperformed the frontline indices to rise 0.7% each. 

"Yesterday’s peaks were held, and a collapse usually associated with some gap-up openings was averted, suggesting bargain hunting is very much alive. Such interest looks laden with caution though, and the positioning of oscillators suggest that there is no particular keenness to take a side. To this end, a “buy on dips” approach is favoured, with an eye on 9,080 intraday, and on 9,000 from a medium term point of view," said brokerage Geojit Financial Services in a technical note.

Meanwhile, rupee hit its highest level since November 2015 to appreciate by 25 paise to 65.56 in today's trade. 

On Tuesday, foreign investors turned net buyers and bought equities worth Rs 4,088 crore, while domestic investors sold equities worth Rs 1,518 crore, provisional data available with BSE showed. 

Buzzing stocks

Nifty IT index was the only sectoral loser among NSE indices after the rupee strengthened against the US dollar.

Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro and Tech Mahindra were down in the range of 1%-2% on the National Stock Exchange (NSE).

Tata Chemicals fell over 2% to Rs 551 after the company said it has received a notice from the Central Pollution Control Board on March 11 directing the company under Section 5 of the Environment Protection Act, 1986 to shut down plant operations at Haldia, West Bengal for alleged non-compliance with the prescribed norms for liquid affluent discharge. 

Talwalkars Better Value Fitness rose over 3% to Rs 235 after the company signed an MoU diligence to invest in equity shares of Force Fitness Limited (SNAP), India’s third largest gym company and the exclusive master franchisee in India of “Snap Fitness Inc.”. 

CPI inflation at 4-month high

Retail inflation rose to 4-month high of 3.65% in February mainly due to surge in price of food items like fruits, sugar and confectionery. Measured in terms of Consumer Price Index (CPI), the inflation had dipped to a multi-year low of 3.17% in January this year on account of cash crunch following demonetisation. It was 5.26% in February last year.

Fed hike certain?

Federal funds futures – a mechanism to gauge market expectations of interest rate movement – showed traders are 93% certain the Fed will raise its benchmark rate by at least 25 basis points. With an immediate rate hike fully priced in, investors will squarely focus on Fed commentary to predict the future path of interest rates.

Global markets

Asian markets slipped in Wednesday's trade. The MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3% after posting its second-biggest daily gain this year in the previous session. Japan's benchmark Nikkei was also down 0.3% while stocks in South Korea and Australia declined 0.2% and 0.5%, respectively. Hong Kong's Hang Senf index fell 0.1%, while China's Shanghai Composite was little changed. Overnight, US stocks fell as investors reduced positions ahead of the interest rate decision by the Fed.