Market today: All eyes on Federal Reserve's policy decision

Share market today: The US Fed's policy decision later today will be a major trigger for markets globally. Apart from that, release of economic data in some Asian markets will also be investors' radar

Share market today: Indian benchmark indices--BSE Sensex and Nifty 50--are likely to open on a muted note, with a slightly positive bias, ahead of the Federal Open Market Committee's (FOMC) policy decision, scheduled to be announced later in the day. 

At around 7:29 AM, GIFT Nifty futures were up 14.7 points at 25,464.5.

That apart, the S&P 500 and Dow Jones recorded new life highs during Tuesday's session, after US retail sales data for August came a lot stronger than expected. This suggests the US economy is on a strong footing, and financial conditions are the loosest since April 2022, according to Reuters. Easing inflation will play a significant role in the quantum of Fed's policy rate cut that is expected to begin a monetary easing cycle  for the first time in four and a half years.

 

However, the S&P 500 finished flat with a positive bias, while the Dow Jones ended flat with a negative bias. Meanwhile, the Nasdaq gained 0.20 per cent at close.

Global triggers

Globally, the Federal Reserve's policy decision is among the biggest events driving sentiments in the domestic stock market today. While most analysts are expecting a 25 basis points (bps) rate cut, a 50 bps rate cut cannot be ruled out.

However, local events can also impact markets in the Asia-Pacific region, including India. Investors will be keeping a watch on the Indonesian central bank's rate decision, Japanese machinery orders and trade data, and public comments from the Philippine central bank governor.

Domestic data speak

Back home, India’s trade deficit widened to a 10-month high of $29.7 billion in August, as imports hit a record high of $64.4 billion on a doubling of gold inflows, while exports contracted for the second month in a row to $34.7 billion due to softening of oil prices and muted global demand.

Additionally, the country's wholesale price index (WPI)-based inflation eased to a four-month low to 1.31 per cent on an annual basis in August from 2.04 per cent in July, due to a reduction in the prices of manufactured products and food items, data released by the Ministry of Commerce and Industry showed on Tuesday.

Asian markets performance today

Markets in the Asia-Pacific region were mixed. At last count, ASX 200 had gained 0.12 per cent, while South Korea's Kospi was up 0.13 per cent and Japan's Nikkei was up 0.87 per cent. Meanwhile, Hong Kong's Hang Seng was up 1.37 per cent, whereas Shanghai was flat with a negative bias.

Crude oil check

On the commodity front, last seen, Brent crude futures were flat with a positive bias to $73.73 per barrel.

That apart, the Indian government slashed windfall tax, which is notified fortnightly, on domestically produced crude oil to 'nil' per tonne with effect from September 18 on Tuesday. The last such revision took place on August 31, when windfall tax on crude petroleum was set at Rs 1,850 per tonne.

Here's how analysts view today's (September 18) trading session

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities

A small candle was formed on the daily chart with identical opening and closing. After the decisive upside breakout of September 12, the current range bound action of the last few sessions could be an indication of a breather pattern and such actions more often result in an uptrend continuation. 

A sustainable up move above 25,450-25,500 could open the next upside target of 25,800 in the near term. Immediate support is placed at 25,200.

Rupak De, Senior Technical Analyst, LKP Securities

Nifty continues to consolidate near its all-time high, where a trendline resistance is observed. A breakout from the recent range-bound pattern could provide a clear direction for the Nifty. Immediate support is at 25,350, and a fall below this level might lead to the unwinding of put option writing positions, potentially triggering a correction toward 25,000. On the upside, resistance is seen at 25,500, and a strong upward move may be expected if Nifty breaks above this level.

Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One Ltd

Despite the winning streak, the candle formation for Nifty lacks conviction; hence, a cautiously optimistic approach is warranted. On the level-specific front, as there have been insignificant alterations, the view remains the same. On the higher end, 25,500-25,600 is expected to pose a moderate challenge for the bulls soon. While on the lower end, 25,300-25,200 is expected to act as a buffer and could present an opportunity to strategically increase long positions in the benchmark.

Market participants seem a bit watchful ahead of the FOMC announcement; hence, a pragmatic approach with proper risk management is advisable for the traders’ fraternity. Additionally, one must refrain from complacency and aggressive bets as volatility is likely to surge in the comparable period.

IPO watch today: Innomet Advanced Materials listing

Shares of Innomet Advanced Materials will be listed on NSE SME today.

FII, DII update: How much did FIIs, and DIIs buy or sell on September 17?

As per data available on the NSE, Foreign Institutional Investors (FII) net bought Indian equities worth Rs 482.69 crore, while DII's were net buyers of equities worth Rs 874.15 crore in Tuesday's trading session.

Indian markets on Tuesday:

Benchmark equity indices, the BSE Sensex and Nifty50, ended with gains on Tuesday. The 30-share Sensex advanced 90.88 points or 0.11 per cent to 83,079.66, while the NSE Nifty50 added 34.80 points or 0.14 per cent to settle at 25,418.55.