Mumbai, India (BBN) – The Sensex and Nifty ended flat as a sharp rally in rupee hurt the shares of IT firms and the sentiment turned cautious ahead of the US Federal Reserve’s rate decision.
The Fed is almost universally expected to raise its benchmark interest rates, but investors are keen on seeing how much more tightening will happen this year, reports The Hindu Business Line.
The 30-share BSE index Sensex ended down by 44.52 points or 0.15 per cent at 29,398.11 and the 50-share NSE index Nifty closed down by 2.2 points or 0.02 per cent at 9,084.80.
The NSE index hit a record high of 9,122.75 in the previous session.
Among BSE sectoral indices, IT index fell the most by 1.81 per cent, TECk 1.2 per cent and oil & gas 0.03 per cent.
On the other hand, realty index was up 0.72 per cent, auto 0.71 per cent, infrastructure 0.46 per cent and consumer durables 0.45 per cent.
Top five Sensex gainers were Tata Steel (+1.24 per cent), Hero MotoCorp (+1.24 per cent), Reliance (+1.16 per cent), State Bank of India (+0.98 per cent) and Tata Motors (+0.79 per cent), while the major losers were TCS (-2.42 per cent), Infosys (-2.21 per cent), HUL (-1.54 per cent), Wipro (-1.39 per cent) and Coal India (-0.85 per cent).
Worries about the Fed and concerns about domestic share valuations could cap further gains in equities, analysts said, even as the broader sentiment remains positive.
“The market is definitely in a bullish phase but it is difficult to say how long the positive effect of BJP’s win will last,” said Mugilan K, deputy manager of research at Cholamandalam Securities.
Meanwhile, benchmark 10-year bond yields fell 3 basis points to 6.87 per cent after data released late on Tuesday showed that February consumer inflation came largely in line with expectations.
Sentiment has been boosted after results over the weekend showed that the ruling Bharatiya Janata Party scored an overwhelming win in the key northern state of Uttar Pradesh. The victory was widely seen as a strong endorsement of Prime Minister Narendra Modi’s agenda.
Foreign investors were net buyers of Rs 4,100 crore ($625.76 million) of shares on Tuesday, when the NSE index hit a record high of 9,122.75, according to BSE data.
That marked the biggest single-day net purchase since February 17, according to Thomson Reuters estimates.
This helped the rupee climb as far as 65.40 per dollar on Wednesday, its strongest since November 2015, compared with its previous close of 65.80.
Two traders said the Reserve Bank of India stepped in for a second straight day to cap the gains.