Sensex and Nifty 50 were marginally higher in the morning trade on May 22, ahead of the minutes of the Federal Open Market Committee (FOMC) meeting held on April 30-May 1. Investors are expected to remain cautious ahead of the release as they will look for details of the deliberations to gauge which way the Fed may be leaning in the coming months.
At 09.18 am, the Sensex was up 41.5 points or 0.1 percent at 73,994 and the Nifty 50 was up 9.50 points at 22,538. About 1,755 shares advanced, 682 declined, and 104 were unchanged.
IT, energy and FMCG indices gained, while financial services were the major laggards. Coal India stock was the top gainer on the Nifty index, rising nearly 3 percent. The PSU mining stock has risen more than 11 percent in the last 5 days. Reliance Industries was also among the top gainers with a jump of nearly 2 percent from the previous close.
Markets looking for policy easing cues from US Fed minutes
Benchmark indices have seen moderate gains for the last 4 sessions, albeit with rising volatility. As election uncertainty continues to weigh on the market, investors are now looking for clues about the timing and extent of the US Fed policy easing. The minutes from the Federal Open Market Committee's latest meeting will be released later today.
"People are less worried about immediate actions and more worried about the course of the action that will be taken by the US Federal Reserve. However, the course of action remains unclear because of geopolitical concerns," said Sandip Agarwal, Fund manager and Co-founder, of Sowilo Investment Managers LLP.
Indian indices may see consolidation; check Nifty levels to watch
"Early action at GIFT Nifty suggests a volatile day as sentiment wavers after Federal Reserve officials, including Governor Christopher Waller, reiterated the need for sustained inflation decline before considering rate cuts," said Prashanth Tapse, Senior VP (Research), Mehta Equities.
Rajesh Bhosale, Technical Analyst at Angel One, said that while the undertone remains bullish, we may see consolidation in the major indices with sector rotation continuing.
Nifty 50 can find support at 22,450 followed by 22,400 and 22,350, said Deven Mehata, Research Analyst at Choice Broking. "On the higher side, 22,600 can be an immediate resistance, followed by 22,650 and
Volatility to stay high
"With the end of the election phase approaching and the verdict nearing, volatility is likely to stay high," said Bhosale. He also asked traders to monitor global developments as any issues could impact the recent run.
The Indian market is in a sweet spot compared to other markets and eventually, infrastructure and rural consumption will pick up substantially, said Sandip Agarwal. He said that the ongoing election is the only factor causing market participants to be indecisive.
Agarwal was of the view that volatility provides good buying opportunities and allows underperforming stocks to improve.
Regarding rising commodity prices, Agarwal said that it will eventually bring inflation back into focus. "Such sharp moves in commodities are not a very good sign," he added.
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