Indian stocks traded in a volatile zone on Wednesday as investors turned cautious ahead of two key events – the interim Union Budget on February 1 and the US Federal Reserve’s interest rate decision later in the day.
The S&P BSE Sensex was up 7275 points at 71,415 in late morning deals while the NSE Nifty 50 index rose 81 points to 21,603.
Declines in IT, bank, and capital goods shares offset gains in auto, metal, and oil & gas stocks.
Larsen & Toubro was the top Sensex laggard, plunging over 6% after its quarterly profit missed estimates. Titan, Bharti Airtel, Power Grid, Infosys, and Wipro were the other prominent losers.
Conversely, Tata Motors, M&M, UltraTech Cement, Reliance Industries, Maruti Suzuki, and Tata Steel bucked the weaker market trend to trade higher.
Broader Asian markets were mostly lower as China’s Shanghai Composite index and the Hang Seng index tumbled over 1.5% each amid concerns over policy tightening. Japan’s Nikkei shed 0.5% while South Korea’s Kospi index dropped 0.3%.
Market experts said investor sentiment remains cautious ahead of the interim budget, which will be the last budget of the Modi government before the general elections next year. Global cues are also dicey amid worries of slower economic growth and further US interest rate hikes to contain inflation.
How the markets fare over the next few sessions will depend on the budget announcements and signals from the Fed regarding the rate hike trajectory. Some volatility can be expected till more clarity emerges on these key factors.
