Sensex, Nifty slip as Fed pauses rate cuts; M&M, Asian Paints drag markets
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The benchmark equity indices, the Sensex and the Nifty, snapped a two-day winning streak on Thursday, slipping as investors booked profits and adopted a cautious approach after the US Federal Reserve paused interest rate cuts.
At the time of reporting, the Sensex was trading 546.82 points or 0.66% lower at 81,797.86, while the Nifty50 declined to 25,188.15, down 154.61 points or 0.61%.
The US Federal Reserve has voted to hold interest rates as its chair, Jerome Powell, defended the importance of central bank independence.
The Fed said it will keep its key lending rate between 3.5% and 3.75%, stating that economic activity in the US "has been expanding at a solid pace".
Investors also booked gains after the benchmarks had advanced nearly 1% over the previous two sessions.
Selling pressure emerged across IT, auto, and FMCG stocks after the recent rally, which had been driven by improved sentiment following the announcement of a free trade agreement with the European Union earlier this week.
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Major laggards of today's trade are: Mahindra and Mahindra, which fell 3.57% and Asian Paints, which declined by 3.48%. InterGlobe Aviation and Titan too slipped over 3%.
Leading the Nifty50 pack are Larsen and Troubo and NTPC, which rose above 2.5%, trading higher by 2.84% and 2.61% respectively.
Nifty Oil and Gas index continued its winning streak, rising by 0.72%, at 11,847. Oil India emerged as a top gainer, rising by 5.20% to ₹515.95 in today's trade.
Commenting on the effects of the pause on US Fed rate cut, Naval Kagalwala, COO & Head of Product, Shriram Wealth Ltd, said that this outcome, along expected lines, is a result of a steadily growing economy, healthy consumer spending, and a stabilising job market.
"Language on economic growth was upbeat, with expectations that the impact of tariffs on inflation will peak by mid-year and fall after that. This should broadly coincide with the end of term in May'26 for the current Fed Chair Powell. Longer tenor US Treasury yields edged marginally higher, with slowing possibility of further cuts.
"Indian bond market participants continue to wait for the Union Budget announcements, with all eyes on the fiscal deficit and market borrowing for FY27. 10-year G-Sec yields have risen by about 13 bps in the last one month, with limited respite from RBI’s liquidity announcements as supply fatigue continues."