Nifty Edges Down, Sensex Ticks Up at Pre Open, Pointing to Mixed Start as Hawkish Fed Looms

Mumbai, June 18: Indian shares were mixed at pre-open as a hawkish Federal Reserve offset optimism from easier oil prices and U.S.-Iran interim peace agreement. 

Nifty 50 traded 0.16% lower at pre-open while Sensex rose 0.13% even as Gift Nifty traded at 24,087.50, which is around Nifty 50’s previous close of 24,085.70. 

To be sure, the Fed left interest rates unchanged as widely expected, but markets are wary that policymakers could resume rate hikes later in the year if inflationary pressures persist, especially as newly appointed Fed Chair Kevin Warsh stressed the need to keep inflation under control. Higher U.S. interest rates tend to draw capital away from emerging markets such as India, tempering investor risk appetite. 

Both domestic benchmark indices have risen over the past four sessions.  

The stock of BSE is likely to remain in the spotlight after the National Stock Exchange submitted draft IPO papers to the securities regulator on Wednesday. The proposed offering consists of 148.9 million shares, including a 24.75-million-share sale by State Bank of India.  

Spotlight will also be falling on Lupin, HFCL and Waaree Renewable Technologies. Lupin rolled out Azilsartan Medoxomil tablets for the treatment of essential hypertension in the United States. HFCL won a Rs 2,666 crore contract from Rail Vikas Nigam under the BharatNet Phase III project in Uttar Pradesh. Waaree Renewable Technologies said the value of an existing solar power project order has been revised upward by Rs 30.91 crore, taking the total contract value to Rs 1,045 crore. 

As for global cues, Japan’s Nikkei climbed to a fresh record high above 71,000, aided by continued strength in semiconductor and artificial intelligence-related stocks. South Korea’s benchmark index gained about 0.7%, while the MSCI Asia-Pacific ex-Japan index edged 0.1% higher, reflecting cautious optimism across the region as easing energy prices offset concerns about global monetary policy. 

U.S. equities ended lower overnight after investors digested the Federal Reserve’s latest policy decision and comments from Fed Chair Kevin Warsh, who stressed the need to keep inflation under control. 

Although the central bank left interest rates unchanged as expected, markets remained wary that policymakers could resume rate hikes later this year if inflation proves sticky. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all closed lower, led by losses in technology stocks as Treasury yields moved higher. 

However, U.S. stock futures advanced in Asian hours, as investors weighed the Fed’s hawkish stance against improving geopolitical conditions and declining oil prices. 

European equities ended modestly higher on Wednesday as investors awaited greater clarity on the U.S.-Iran agreement and its implications for energy supplies through the Strait of Hormuz. The pan-European STOXX 600 index rose 0.5%, though weakness in automakers, including BMW, capped gains. 

Crude oil prices remained under pressure after the U.S.-Iran agreement eased concerns over potential supply disruptions in the Middle East. Lower oil prices have helped alleviate global inflation concerns and are supportive for major importing nations such as India. 

Source

•  Exchanges