Sensex little changed ahead of Fed meeting

By Aby Jose Koilparambil

REUTERS - Indian shares were little changed on Tuesday in quiet trading ahead of the U.S. Federal Reserve's two-day policy meeting that starts later in the day, while Tata Motors Ltd jumped after an unnamed buyer bought a stake at a premium.

The Fed is widely expected to raise interest rates by a quarter percentage point, its first for this year, when it announces its decision on Wednesday.

Investors will closely look at the Fed's statement on future action given fears that aggressive rate hikes could spark outflows from emerging markets to the United States.

Such an outcome could hit Indian shares further given that markets are already under pressure over worries that demonetisation would hurt the economy bigger than expected.

"The Fed is slated to hike the rates. On the domestic front, the impact of demonetisation continues and a lot of companies are reporting a slowdown," said Alok Ranjan, head-PMS at Way2Wealth Brokers Pvt Ltd.

The Nifty was up 0.06 percent at 8,176.00 by 0524 GMT, while the Sensex was 0.2 percent higher at 26,568.32.

Shares of Tata Motors surged as much as 7 percent, making them the top gainer on the NSE index, after an undisclosed buyer bought about 50 million shares in two block deals at an up to 10 percent premium to Monday's close. They were last up 2.15 percent.

Energy stocks rose with oil retailer Bharat Petroleum Corp leading the gains. Bharat Petroleum gained as much as 2.30 percent, after Monday's 3.6 percent fall due to a jump in crude prices.

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu)