Benchmark stock market indices in India ended Tuesday’s trading session with modest gains, reflecting investor optimism ahead of a crucial decision by the US Federal Reserve. The S&P BSE Sensex, a key indicator of the Indian equity market, closed up by 90.88 points at 83,079.66. The NSE Nifty50, another major index, advanced by 34.80 points to settle at 25,418.55.
The market's positive performance was driven by expectations of a possible interest rate cut by the US Federal Reserve, which is scheduled to announce its decision on September 18. Investors are anticipating a potential rate cut, which could influence global liquidity and affect investment flows into emerging markets like India.
Despite the overall upward movement in the indices, the broader market showed mixed results. Smallcap and midcap stocks faced some pressure, diverging from the gains seen in the larger, more established companies. This indicates that while major indices performed well, smaller stocks struggled to maintain the same momentum.
Among the notable performers on the Nifty50 were Hero MotoCorp, Bajaj Auto, Bharti Airtel, NTPC, and Mahindra & Mahindra. These companies saw significant increases, contributing to the overall rise in the index. In contrast, Tata Motors, Eicher Motors, Tata Steel, Coal India, and JSW Steel were among the top decliners, reflecting some sector-specific challenges and profit-taking.
In individual stock movements, Bajaj Housing Finance continued its upward trajectory, hitting the upper circuit limit with a 10% increase following a successful market debut the previous day. Ola Electric Mobility also experienced a substantial surge, with its shares rising nearly 10% to reach Rs 118.10, driven by positive market sentiment and investor enthusiasm.
Vinod Nair, Head of Research at Geojit Financial Services, provided insights into the market dynamics. He attributed the subtle positive momentum in the Indian market to the anticipation of a rate-cut cycle by the US Federal Reserve. Although a 25 basis points reduction is largely anticipated, Nair highlighted that investors are also closely monitoring the Fed's statements regarding the current state of the economy and future monetary policy directions.
Nair further noted that robust institutional flows have continued to support the domestic market, providing a foundation for the positive trend observed. There was notable buying interest in large-cap stocks, particularly in sectors such as information technology (IT), fast-moving consumer goods (FMCG), and private banking. This sectoral strength underscores a broader positive sentiment within the market, even as smaller stocks face varying degrees of pressure.
