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Benchmark indices continue to remain volatile in a narrow range with investors remaining cautious ahead of FOMC outcome.
Goldman Sachs remains "underweight" on Indian shares in its Asia Pacific portfolio and maintains its Nifty target at 5,700, saying the macro outlook remains challenged which coupled with tighter financial conditions may lead to lower valuations.
At 1255 hrs, the Sensex was up 41 points at 19,845 and the Nifty was trading at 5,859 levels up 8 points.
According to Devangshu Datta, technical analyst, “Range trading may continue till the US Fed announces taper policy. Nifty could stay inside 5,825-5,900 or even narrower within, 5,825-5,875.”
Asian markets kept their nerve on Wednesday counting on the Federal Reserve to launch only a modest scaling back of stimulus later in the day, though all assets were vulnerable to any hint of hawkishness from the world's most powerful central bank.
Expectations are that the Federal Open Market Committee will be measured with any cuts to its $85 billion in monthly asset buying, while also seeking to reassure investors that the day of an actual policy tightening is still distant.
Back home, rupee continued to trade strong in the afternoon amid dollar flows from foreign banks.
At 12:47 PM, the rupee was trading at Rs 63.12 compared with previous close of Rs 63.37 per dollar.
Meanwhile, foreign direct investment inflows into India rose an annual 12.9% in July to $1.66 billion, the government said in statement released late on Tuesday, the highest monthly inflow for three months.
On the sectoral front, BSE Realty, FMCG, Bankex, Consumer Durables, Healthcare and Capital Goods indices have gained between 0.5-1%. However, BSE Metal and Auto indices are trading marginally lower.
The main gainers on the Sensex at this hour include Tata Power, Dr Reddy’s Lab, SBI, HUL, NTPC, Wipro, Coal India and Cipla, all gaining between 1-2%.
On the losing side, HDFC, BHEL, Sesa Goa, M&M and Hero Moto have declined between 1-3%.
Among other shares, MindTree is trading higher by 3% at Rs 1,114, extending its previous day’s nearly 2% gain, after the company announced a partnership with SAP America to enable customers execute their Cloud strategies on SAP's cloud applications like SuccessFactors and mobile platforms.
Shares of gold finance companies such as Muthoot Finance and Manappuram Finance are under pressure second day in a row after the Reserve Bank of India (RBI) issued gold loan guidelines.
Muthoot Finance has dipped 5.5% at Rs 97.95 on BSE. The stock had tanked over 8% yesterday. Manappuram Finance is locked in lower circuit of 5% at Rs 14.75 with no buyers are seen on the counter.
The market breadth in BSE remains marginally positive with 1,043 shares advancing and 987 shares declining.
