Indian stock markets may continue to consolidate ahead of US Fed meeting

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MUMBAI: Indian markets are expected to continue consolidating on Wednesday as trends from SGX Nifty suggest a negative opening for benchmarks.

On Tuesday, the BSE Sensex finished at 39,044.35, up 287.72 points or 0.74%. The 50-stock Nifty index was at 11,521.80, adding 81.75 points or 0.71%.

Most Asian stocks rose on Wednesday, extending a rally driven by bullish Chinese and US economic data, but the dollar, US yields and gold were flat as investors awaited the Federal Reserve’s take on economy at its political meeting.

Following strong data on China’s industrial production and retail sales and rising U.S. industrial production, investors are focusing on the Fed’s policy statement expected on Wednesday, the first since the president Jerome Powell announced increased tolerance for higher inflation.

The Fed is expected to announce its decision at 6:00 p.m. GMT on Wednesday, followed by a press conference from Powell. The Fed meeting comes as U.S. lawmakers remain at an impasse over a new stimulus package amid lingering concerns about the recovery of the world‘s largest economy from the coronavirus pandemic.

Returning home, Life Insurance Corporation of India (LIC) plans to gradually sell its stake in IDBI Bank, according to a Mint report. In January 2019, India’s largest insurer bought 44% of IDBI Bank’s capital for 21,624 crore, saving it from collapse. After purchasing the stake, LIC owns 51% of the bank.

No-frills carrier SpiceJet Limited on Tuesday reported a consolidated loss of 600.52 crore for the June quarter, mainly due to muted travel demand following the coronavirus outbreak. The airline reported a profit of 262.89 crore over the same period of the previous year.

Computer company Hexaware Technologies said on Tuesday that market regulator Sebi had authorized the extension of the close of its delisting offer until September 16. The process of voluntary delisting of Hexaware Technologies from BSE and NSE began on September 9. The delisting offer with a floor price of The closing of 264.97 per share was scheduled for September 15.

Private sector lender Lakshmi Vilas Bank said on Tuesday that mutual due diligence for its deal with Clix Group was “substantially complete”. “Said the bank in a regulatory file. The bank has shortlisted three companies for an assessment exercise and is expected to finalize one within the next week, a person familiar with the matter said.

In the currency market, the yen hit a two-week high at 105.26 per dollar, with traders betting that the Fed acting on a more accommodative approach to inflation could weaken the greenback.

The euro fell less than 0.1% to buy $ 1.1838, while the dollar index, which tracks the greenback against a basket of six big rivals, walked at 93.092.

The yield on benchmark 10-year Treasury bills US10YT was unchanged from Tuesday’s close of 0.6789%, and spot gold was flat at $ 1,955.48 an ounce.

Unlike subdued activity elsewhere, oil prices have jumped, a hurricane disrupting US offshore oil and gas production and declining US inventories.

Global benchmark Brent crude rose 0.79% to $ 40.85 per barrel and U.S. West Texas Intermediate crude rose 1.02% to $ 38.67 per barrel.

Reuters contributed to the story.

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