India's benchmark stock indices declined through Wednesday for the second consecutive session, ahead of the U.S. Federal Reserve's decision on interest rates later in the day. Realty, media and pharmaceutical sectors advanced, whereas metals fell the most.
Sensex slipped over 200 points from the day's high, whereas Nifty 50 declined nearly 100 points from the highest level of the day. Nifty 50 closed below the 19,000 level, whereas Sensex slipped below the 63,600 mark.
"The price action trailed back into the previous gap-down area on relatively higher volume," said Avdhut Bagkar, analyst, technical and derivatives, StoxBox.
The S&P BSE Sensex closed down 284 points, or 0.44%, at 63,591.33, while the NSE Nifty 50 fell 91 points, or 0.47%, to close at 18,989.15.
"The zone of 19,330–19,235 is anticipated to continue to act as an overhead supply zone, and decisively reclaiming the zone will allow the index to attract further bullish strength," Bagkar said.
It is important to understand that equity markets globally are being impacted more by the spike in U.S. bond yields than the Israel-Hamas conflict, said VK Vijayakumar, chief investment strategist at Geojit Financial Services Ltd.
"The U.S. 10-year bond yield above 4.9% will continue to be a major headwind for stock markets, particularly for those in emerging markets. Sustained selling by FIIs is likely to continue weighing on markets."
Markets anticipate a status quo in the Fed policy; however, the sustenance of the high rate for a prolonged period is the issue, according to Vinod Nair, head of research at Geojit.
"Ease in demand, as reflected by October PMI data, led to more cautiousness in India compared to Asian and European peers. However, good H1 gross tax collection and in-line expectation monthly volume demand by the auto sector resulted in a minimal negative effect," he said.
U.S. stock futures slipped ahead of the Federal Reserve interest rate decision and the U.S. government's new borrowing plan. Contracts on the S&P 500 and the Nasdaq 100 dropped by about 0.3%. The Stoxx Europe 600 rose 0.2%.
MSCI's Asia Pacific rose around 1%, led higher by Japanese stocks, with the Topix benchmark gaining the most in a year. Shares in Hong Kong and mainland China fluctuated after a private survey showed China's manufacturing activity contracted.
Traders are taking the latest U.S. economic data as the street expects another interest-rate hold decision from the Fed. The focus is also on the U.S. government's new borrowing plan, due hours ahead of the Fed's announcement.
Bharat Petroleum Corp., Hindalco Industries Ltd., Reliance Industries Ltd., Sun Pharmaceutical Industries Ltd. and State Bank of India positively contributed to changes in the Nifty.
Whereas, Axis Bank Ltd., Asian Paints Ltd., Infosys Ltd., Larsen & Toubro Ltd. and Tata Consultancy Services Ltd. weighed on the index.
The broader market indices ended marginally lower; the S&P BSE MidCap was down 0.35%, whereas S&P BSE SmallCap was 0.10% lower.
Sixteen out of the 20 sectors compiled by BSE Ltd. declined, while four sectors advanced. S&P BSE Metal and S&P BSE Power fell the most.
The market breadth was skewed in the favour of sellers. About 1,640 stocks rose, 2,005 declined, and 138 remained unchanged on the BSE.
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