Market At Record High: Sensex & Nifty Soar To Fresh All-Time High Ahead Of FOMC Outcome; Banks Lead

The Indian stock markets kicked off the trading session on September 18 with a flat start, but it didn't take long for both Sensex and Nifty to surge to record highs. Investors and traders were positioning themselves ahead of the highly anticipated US Federal Reserve's FOMC decision, which is expected to signal crucial changes in monetary policy.

At 12:30 pm, the Sensex was up by 227 points or 0.3%, sitting at a new high of 83,307, having peaked earlier at 83,310.32. Meanwhile, the Nifty 50 index climbed 55 points or 0.22%, touching a new milestone of 25,474. The surge was led primarily by gains in banking stocks, while IT shares lagged behind, dragging the overall market sentiment slightly.

The Nifty Bank index was the star performer of the session, rising over 1% as major banks like HDFC Bank, ICICI Bank, and SBI led the charge. This sector's robust performance reflects market confidence in the resilience of Indian financial institutions, as well as anticipation of favourable conditions following the Fed's announcement.

On the other hand, the Nifty IT index faced a tough day, tumbling by a staggering 3%. IT heavyweights Infosys, TCS, and Tech Mahindra were the biggest culprits, each declining between 1% and 4.3%. Mphasis took the hardest hit, becoming the session's largest loser. Other tech giants like Wipro and LTIMindtree also joined the downturn, contributing to the overall weakness in the IT sector.

While the benchmark indices hit record highs, the broader markets failed to mirror the same optimism. The BSE Smallcap index remained flat, and the BSE Midcap index dipped by 0.3%, underperforming the leading indices. Out of 3,334 traded shares, about 1,580 stocks advanced, 1,637 declined, and 117 remained unchanged.

On the Nifty 50, some key players made notable gains, despite the volatility. UltraTech Cement, Britannia Industries, Bajaj Finance, Shriram Finance, and Hero MotoCorp were the top gainers, with their stocks rising by 0.6% to 2%. These stocks benefitted from solid corporate fundamentals and bullish market sentiment.

Conversely, the IT sector's decline dominated the list of top losers. TCS, Infosys, LTIMindtree, Tech Mahindra, and Wipro fell between 1% and 2%, driven by concerns around global economic uncertainties and potential reductions in corporate technology spending.

While Indian markets soared, investors were keeping a close eye on global cues, particularly from the US. Overnight, Wall Street closed at fresh record highs, with both the S&P 500 and the Dow Jones Industrial Average climbing ahead of the Federal Reserve's decision.

Globally, markets in Asia-Pacific showed mixed trends during the morning session. While China resumed trading after a three-day national holiday, South Korea and Hong Kong remained closed.

Investors are awaiting the Federal Open Market Committee (FOMC) decision, with many expecting an interest rate cut. The CME's FedWatch Tool suggests a 65% chance that the Fed will opt for a more aggressive 50 basis point rate cut.

This decision is crucial for global markets, as it could set the tone for borrowing costs and liquidity conditions, impacting sectors like IT and banking in the short term.