Indian Stocks to Open with Minor Changes

Indian stocks are expected to open with minor changes on Wednesday, as analysts anticipate continued profit booking due to indices hovering near record highs. Attention will shift to the Federal Reserve’s interest rate decision and the comments expected later in the day.

The GIFT Nifty stood at 24,949 points at 8:02 a.m. IST, indicating that the Nifty 50 will open near Tuesday’s close of 24,857.3.

On Monday, the Nifty 50 hit a record high of 24,997.55 points.

“The 25,000 level is proving difficult to cross, and we expect range-bound action with some profit booking continuing,” said Deepak Jasani, Head of Retail Research at HDFC Securities.

The market’s reaction to the regulator’s proposals to curb the frenzy in the country’s options markets will be in focus.

Late on Tuesday, the Securities and Exchange Board of India (SEBI) proposed several measures, including more than tripling the minimum trading amount, to temper the exuberance in options trading.

If implemented, these proposals are likely to affect volumes, analysts said.

However, the overall outlook for Indian equities remains positive, supported by earnings momentum, they noted.

“A slight beat on revenues and flat margins keep earnings (so far) slightly above our estimates,” analysts led by Ridham Desai, Equity Strategist at Morgan Stanley, said.

The breadth of earnings beating estimates remains solid, triggering specific stock price increases, they added.

Information technology companies, which derive a significant portion of their revenue from the U.S., will be in focus as the Fed is expected to maintain a pause on rates. Nonetheless, dovish comments could boost sentiment and spur a rally in Indian markets.

Traders are pricing in Fed rate cuts starting from September.