Markets slip ahead of Fed policy decision; HDFC twins top drags

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Equity benchmarks ticked lower in choppy trade on Wednesday, weighed by selling in banking and finance counters, as investors turned cautious ahead of the US Fed’s policy decision.

However, global markets were in better shape after China’s Evergrande group reached a deal to pay some bond interest, calming fears of a default.

The 30-share BSE Sensex slipped 77.94 points or 0.13 per cent to close at 58,927.33. The broader NSE Nifty declined 15.35 points or 0.09 per cent to 17,546.65.

HDFC was the top loser in the Sensex pack, shedding 1.46 per cent, followed by Nestle India, Kotak Bank, ICICI Bank, HDFC Bank, HUL and Axis Bank.

On the other hand, Tech Mahindra, M&M, HCL Tech, Bajaj Auto, RIL and Tata Steel were among the prominent gainers, climbing up to 3.70 per cent.

Domestic benchmark indices traded in a range ahead of crucial FOMC meeting outcome tonight. Global markets also traded mixed with European markets witnessing sharp rebound, said Binod Modi, Head – Strategy at Reliance Securities.

Auto, IT, metal and realty stocks witnessed sharp rebound, while Nifty media index surged over 15 per cent mainly led by a rally in Zee Entertainment following its merger deal with Sony Pictures, which is seen as quite positive for the company, he noted.

India’s largest publicly-traded television network Zee Entertainment Enterprises will merge with Sony Pictures Network India (SPNI), capping days of high drama during which the firm’s shareholders sought removal of key officials.

Sony, which will invest USD 1.575 billion, will hold 52.93 per cent stake in the merged entity and Zee the remaining 47.07, Zee Entertainment Enterprises (ZEEL) said in a statement.

“Despite hopeful signs in the global markets, domestic main indices traded in a narrow range to give away its early gains in today’s volatile session. However, the broad market was robust. Barring banks, all major sectors were in demand and media, metals and realty outperformed.

“Realty stocks were in focus owing to an increase in property registrations in September while easing jitters over the Chinese economy bolstered metal stocks. Investors traded cautiously awaiting the outcome of the FOMC meeting that will clear the air regarding Fed’s tapering plans,” said Vinod Nair, Head of Research at Geojit Financial Services.

BSE bankex, finance, utilities, FMCG and power indices lost up to 0.75 per cent, while the realty index zoomed 8.39 per cent. Metal, auto and basic materials also finished with gains.

Broader BSE midcap and smallcap indices spurted up to 1.51 per cent.

On the macro front, the Asian Development Bank (ADB) lowered India’s growth projections for the current financial year by a percentage point to 10 per cent, mainly due to disruptions in economic activity caused by the second wave of the COVID-19 pandemic.

World stocks were boosted by Evergrande’s interest payment deal, while investors awaited the US Federal Reserve’s policy statement which is expected to shed light on its tapering timeline.

Elsewhere in Asia, bourses in Shanghai ended on a positive note, while Tokyo was in the red. Hong Kong and Seoul markets were closed for holidays.

Stock exchanges in Europe were trading with gains in mid-session deals.

Meanwhile, international oil benchmark Brent crude rose 1.12 per cent to USD 75.19 per barrel.

The rupee slumped 26 paise to close at 73.87 against the US dollar on Wednesday, tracking a strong American currency in the overseas markets.

Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 1,041.92 crore, as per exchange data.