Stock market today: Nifty 50, Sensex end flat ahead of US Fed meet outcome, 2W stocks shine
Indian market experienced another day of consolidation on Tuesday, as traders remained cautious ahead of the Federal Reserve’s upcoming policy meeting. This week, the Fed is expected to implement its first rate cut since 2020, with the likelihood of a substantial 50 basis point cut rising in recent days.
Amid this backdrop, the Nifty 50 ended the session with a 0.10 per cent gain at 25,408 points, nearing an all-time high of 25,445 points during the session, with just 27 points away. The S&P BSE Sensex ended with a 0.13 per cent gain at 83,098 points, also hitting a new peak.
Among the 50 Nifty constituents, 21 stocks ended in the positive, with Hero MotoCorp leading at 3.1 per cent. Other notable gainers included Bajaj Auto, Bharti Airtel, NTPC, Mahindra & Mahindra, Britannia Industries, Kotak Mahindra Bank, and Larsen & Toubro, all rising between 0.8 per cent and 3.1 per cent.
12 stocks, including HCL Technologies, Tech Mahindra, ICICI Bank, and Cipla, reached new 52-week highs.
Fed policymakers will begin their two-day meeting on Tuesday, with market sentiment divided on whether they will opt for a quarter-point interest rate cut or take the less common route of a half-point reduction. This decision comes after the emergency rate cut in March 2020 at the onset of the Covid pandemic.
According to analysts, August’s retail sales data, which is set to be released on Tuesday, could still influence the Fed’s decision before it is finalized.
Markets are currently pricing in a 59% chance that the Fed will deliver a larger 50 basis point rate cut on Wednesday, up from 25% a month ago, while odds for a modest 25 basis point reduction stand at 41%, according to CME’s FedWatch Tool.
Markets are now factoring in a 59% probability that the Federal Reserve will implement a larger 50-basis point rate cut on Wednesday, up from 25% just a month ago. Meanwhile, the chances of a smaller 25-basis point reduction stand at 41%, according to the CME’s FedWatch Tool.
These expectations persist despite last week’s higher-than-expected inflation data for August, though recent job market figures indicate signs of a slowdown in labor conditions.
IGL, MGL surge on UBS target price upgrade
Shares of city gas distribution companies Mahanagar Gas (MGL) and Indraprastha Gas (IGL) saw gains of up to 6% on Tuesday. This uptick followed a rating upgrade by global brokerage UBS, which changed its recommendation for IGL from ‘sell’ to ‘buy’ and increased its target price from ₹400 to ₹700. This new target reflects an upside potential of 32.32% from IGL’s previous closing price.
Similarly, UBS has raised its target price for Mahanagar Gas from ₹1,600 to ₹2,400 per share, indicating a potential upside of 32% from the stock’s latest closing price. UBS maintained its ‘buy’ recommendation for MGL.