Nifty Declines, Sensex Edges Up At Pre-Open Pointing To Mixed Start As Fed Holds Fire

Mumbai, October 29: Indian shares were mixed at pre open pointing to a split start as the Federal Reserve held fire as expected and Asia traded mixed amid elevated oil. 

Nifty 50 declined 0.3% and Sensex rose 0.2% at pre open.  

The US Federal Reserve held interest rates steady on Wednesday, signalling a wait-and-watch approach as it awaits fresh inflation data and the outcome of next week’s US midterm elections. The central bank said inflation remained elevated, tempering hopes of near-term monetary easing.  

Higher US interest rates tend to boost the appeal of dollar-denominated assets, potentially diverting foreign capital away from emerging markets such as India.  

Foreign portfolio investors (FPIs), however, remained net buyers of Indian equities for a second straight session on Wednesday, purchasing shares worth Rs 872 crore, according to provisional exchange data. Despite the recent buying, they have pulled out $3.74 billion from Indian equities so far in October.  

Domestic benchmarks have declined in six of the past seven sessions as elevated crude oil prices fuel concerns over inflation, the interest-rate outlook and pressure on the rupee.  

Hero MotoCorp’s second-quarter profit fell short of analyst expectations as escalating costs offset steady demand for its motorcycles and scooters.  

Vedanta, a mining major, more than doubled its September-quarter net profit, benefiting from higher production volumes and firm base metal prices.  

United Spirits’ quarterly profit declined 2% as sales of lower-priced liquor brands weakened amid regulatory changes.  

Meesho, an e-commerce company, narrowed its second-quarter loss, supported by higher order volumes and increased advertising revenue from sellers on its platform.  

PNB Housing Finance’s net profit rose 6% year-on-year in the September quarter, driven by healthy loan disbursements and robust credit growth. 

Asian Markets Today 

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.88%, while Japan’s Nikkei 225 edged up 0.3%. South Korea’s Kospi slid 2.8% despite Samsung Electronics reporting a nearly ninefold jump in third-quarter operating profit, driven by strong demand for AI chips. Samsung shares dropped more than 4%, suggesting investors remain wary of lofty technology valuations and the returns from massive AI investments. 

China’s CSI 300 declined 0.98%, while Hong Kong’s Hang Seng gained 0.27%. SK Hynix rose 1.3% after rallying 11% in the previous session following strong earnings, providing some support to semiconductor stocks. 

The divergent moves reflect growing investor scrutiny of whether surging AI-related spending can translate into sustainable earnings growth. Results from Amazon and Intel are also in focus for further indications of the strength of technology demand. 

Wall Street Ends Higher After Fed Decision 

US stocks closed higher on Wednesday after the Federal Reserve kept interest rates unchanged, as expected. The S&P 500 gained 0.3% to 7,743.98, the Nasdaq Composite advanced 0.3% to 26,549.85, and the Dow Jones Industrial Average rose 0.2% to 52,475.10. 

However, the gains offered limited reassurance to Asian technology investors. Alphabet fell sharply in after-hours trading as its results revived concerns about heavy AI-related capital expenditure, while Microsoft gained on stronger-than-expected cash flow. Nasdaq futures subsequently fell 1.4% in early Asian trade, signalling renewed pressure on technology stocks. 

The Fed’s decision also carried a hawkish undertone, with two policymakers favouring a rate increase. Expectations of another hike in December have kept investors focused on inflation and the outlook for borrowing costs. 

Crude Oil Prices Near $115 

Brent crude futures fell 0.6% to $114.60 a barrel on Thursday amid reports of efforts to revive US-Iran peace negotiations. Prices nevertheless remained elevated as geopolitical tensions and potential supply disruptions continued to underpin the market. 

For India, persistently expensive crude threatens to stoke imported inflation, squeeze corporate margins and widen the import bill. It could also weigh on foreign investor sentiment towards Indian equities. 

Source

•  Exchanges