Indian Stock Market Opens Flat As US Fed Pauses Rate Cut Cycle

The domestic benchmark indices opened flat on Thursday as the US Federal Reserve meeting voted unanimously to pause the rate cut cycle, which started last September and has delivered 100 bps of cut to date.

The Sensex was marginally up 49 points or 0.065 percent at 76,582.44, and the Nifty was up 43 points or 0.18 percent at 23,197.20. About 1,539 shares advanced, 701 shares declined and 128 shares unchanged.

The FOMC in the US paused rates at 4.25-4.5 percent. Fed has promised to be data dependent, promising the markets that it is not on a “preset course”.

“Additionally, it has continued to reduce its holdings of treasury securities, agency-backed debt, and mortgage-backed securities. In line with expectations, the policy was largely a non-event,” said Ankita Pathak, Chief Macro and Global Strategist at Ionic Wealth by Angel One.

US markets are closely watching the Chinese AI evolution and that is becoming a bigger driver of heavyweights like tech. According to Dhawal Ghanshyam Dhanani, Fund Manager, SAMCO Mutual Fund, with inflation still elevated and labor market conditions solid, the “Fed Pivot” has come to a standstill.

“This certainly gives the impression that FOMC wants to buy time to assess and digest the impact of the current administration’s policies on tariffs, tax cuts, deregulation, and the like,” said Dhanani.

Meanwhile, Bajaj Finance, Bharti Airtel, Bajaj Finserve, Maruti Suzuki India and Hindustan Unilever added to the Nifty 50 index, while Tata Motors, Infosys, ICICI Bank, HDFC Bank, and Kotak Mahindra Bank Ltd. weighed on the Nifty 50.

On the NSE, nine sectors advanced and three declined out of 12. The NSE Nifty Realty rose the most, and the NSE Nifty Auto declined the most.

On January 29, the foreign institutional investors (FIIs) remained net sellers for the 19th consecutive session as they sold equities worth Rs 2,586 crore, while domestic institutional investors bought equities worth Rs 1,792.71 crore on the same day.

“Ahead of the Union Budget, there was a spike in some fertilizer and railway stocks, and today’s movement will show if this is just a one-day trend or the start of something new,” said market experts.

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