Markets Open Flat Amid Fed Uncertainty And Weak Asian Cues

Indian equity markets opened on a flat note on Thursday, with investor sentiment dampened by the US Federal Reserve’s cautious policy stance and weak trends across Asian markets.

Early trade saw selling pressure across sectors including IT, PSU banks, FMCG, and pharmaceuticals.

By 9:34 AM, the BSE Sensex edged up by just 1.66 points, or 0.00%, to 81,446.32, while the NSE Nifty gained 9.90 points, or 0.04%, to trade at 24,821.95.

Other key indices showed mixed movement. The Nifty Bank index rose 43.15 points or 0.08% to 55,871.90, while the Nifty Midcap 100 declined 40.35 points or 0.07%, settling at 58,068.85.

The Nifty Smallcap 100 index, however, gained 25.60 points, or 0.14%, to trade at 18,404.05.

US Fed holds rates, signals uncertainty ahead

As widely expected, the US Federal Reserve held interest rates steady. However, the Fed’s updated projections revealed a more cautious outlook, suggesting just one quarter-point rate cut each in 2026 and 2027, according to Mandar Bhojane of Choice Broking.

Additionally, while the baseline expectation remains for two cuts in 2024, a growing segment of policymakers now foresee no cuts at all this year.

This mixed guidance left global investors uncertain, impacting both US and Asian markets.

Geopolitical tensions keep markets on edge

Market experts also pointed to geopolitical developments as a critical factor.

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the Nifty is likely to remain within the 24,500–25,000 range unless there is a major shift in the situation surrounding the Israel-Iran conflict.

“If tensions escalate, particularly in the Strait of Hormuz, leading to a spike in crude oil prices, Nifty may struggle to hold the 24,500 support level. However, signs of de-escalation could trigger a breakout beyond the upper band,” he said.

Sectoral movers and institutional flows

In the Sensex pack, stocks such as Tech Mahindra, IndusInd Bank, Infosys, HCLTech, PowerGrid, and Tata Steel were among the top losers in early trade.

Meanwhile, Titan, Mahindra & Mahindra, Kotak Mahindra Bank, and Tata Motors led the gainers.

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Institutional activity showed continued strength. Foreign institutional investors (FIIs) remained net buyers on 18 June, purchasing equities worth ₹890 crore, while domestic institutional investors (DIIs) invested ₹1,091 crore during the session.

Asian and US markets reflect mixed sentiment

Across Asia, major indices, including those in Bangkok, Tokyo, Seoul, Jakarta, Hong Kong, and China, traded in the red, reflecting subdued global risk appetite.

Meanwhile, US markets closed on a mixed note following the Fed announcement. The Dow Jones Industrial Average slipped 44.14 points or 0.10% to close at 42,171.66, while the S&P 500 edged down 1.85 points or 0.03% to 5,980.87.

The Nasdaq Composite, however, managed a modest gain of 25.18 points or 0.13%, closing at 19,546.27.

As global markets await further clarity from economic data and geopolitical developments, Indian investors are expected to remain cautious in the near term.