Fed rate hike, FII selling weigh on Nifty; IT drags, FMCG leads

The Stock Market commenced cautiously on Thursday, September 17, with the Nifty 50 trading at 23,250.55, marking a 0.14 percent increase from the previous close of 23,217.60. The Sensex opened at 74,182.62, up 58.75 points (0.08 percent) from the prior close of 74,336.45. Following the Federal Reserve's decision to raise interest rates by 25 basis points to a 3.75 percent-4 percent range, the markets opened cautiously.

Chair Kevin Warsh hinted at the possibility of another increase this year. Wall Street suffered a decline, with the S&P 500, Dow Jones, and Nasdaq falling by 0.7 percent, 1.3 percent, and 0.4 percent, respectively. The US Dollar Index surpassed the 100-mark, hovering around 100.35, while the 10-year U.S. Treasury yield remained near 5 percent.

Among the Nifty 50 gainers, BEL surged by 1.70 percent, followed by Bajaj Finance at 1.32 percent. Asian Paints rose by 0.96 percent to ₹2,439.90, Power Grid increased by 0.89 percent to ₹265.15, and Reliance Industries gained 0.89 percent to trade at ₹1,251.00. ONGC experienced the most significant decline, dropping 1.01 percent to ₹234.40.

HCL Technologies fell by 0.93 percent to ₹1,241.40, HDFC Bank slipped by 0.88 percent to ₹715.15, Tech Mahindra declined by 0.83 percent to ₹1,545.00, and Wipro decreased by 0.70 percent to ₹165.73. The IT index saw a drop of 1.55 percent, while the FMCG index gained 1.62 percent, outperforming other sectors. Banking showed resilience, with Bank Nifty closing at 56,292.45, up 497.70 points (0.89 percent), although it remains below key resistance levels.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, believed that the hawkish message from the Fed could be reassuring, but high bond yields would continue to weigh on equity markets. He also mentioned that U.S. corporate earnings remain strong, and domestic institutional investors partially absorbed the pressure by purchasing equities worth ₹3,900 crore.

Concerns about sustained FII selling, the Russia sanctions bill, and India's 10-year government bond yield pointed towards a potentially challenging market environment.