INDIA STOCKS-Indian shares flat as caution prevails on key Fed decision day

Credit: REUTERS/FRANCIS MASCARENHAS

By Bharath Rajeswaran and Hritam Mukherjee

BENGALURU, March 20 (Reuters) - India's blue-chips treaded water on Wednesday, hovering around five-week lows hit in the previous session, ahead of the much-anticipated U.S. Federal Reserve's interest rate decision and commentary later in the day.

The blue-chip NSE Nifty 50 .NSEI index added 0.10% to 21,839.10, while the BSE Sensex .BSESN gained 0.12% to 72,101.69.

Both the indexes swung between gains of 0.6% and losses of 0.3% during the session, before settling flat.

Markets are in a wait-and-watch mode and have not yet priced in the possibility of a reduction in the number and quantum of U.S. rate cuts in 2024, said Narendra Solanki, head of equity research at Anand Rathi.

While the Fed is expected to keep rates unchanged, any hawkish comments from Chair Jerome Powell hinting at a delay in the onset of rate cuts could weigh as markets anticipate rate cuts beginning from June.

U.S.-rate sensitive IT stocks .NIFTYIT, which dropped about 3% on Tuesday, shed another 0.18%. Financial stocks .NIFTYFIN, the highest-weighted sector, fell 0.28%.

Auto stocks .NIFTYAUTO added 0.26%, led by a 4.22% rise in Eicher Motors EICH.NS after UBS upgraded the motorcycle maker's shares, citing likely gains from new Royal Enfield models and attractive valuations.

Eicher was the top Nifty 50 gainer, followed by Maruti Suzuki MRTI.NS, which gained about 3% and hit a record high.

Energy .NIFTYENR and oil & gas .NIFOILGAS added about 1% and 1.3%, respectively, led by a rebound in Reliance Industries RELI.NS and oil marketing companies after a sharp drop in the previous session.

Reliance, BPCL BPCL.NS, HPCL HPCL.NS and IOC IOC.NS gained between 1.3% and 2.5%. They had lost between 1%-4.3% on Tuesday.

Tata Steel TISC.NS and Hindalco Industries HALC.NS fell 2.08% and 1.35%, respectively, following a drop in global metal prices and a rise in the U.S. dollar. MET/L

Small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 were little changed. So far in March, they are down about 8.65% and 5%, respectively, compared to a 0.65% drop in the Nifty 50, on concerns of elevated valuations.

(Reporting by Bharath Rajeswaran and Hritam Mukherjee in Bengaluru; Editing by Sohini Goswami, Shounak Dasgupta and Janane Venkatraman)

((bharath.rajeswaran@thomsonreuters.com; +91 9769003463))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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