Stock market today: BSE Sensex, Nifty50 hold near record highs ahead of US Fed policy decision

Stock market today: Indian equity benchmark indices, BSE Sensex and Nifty50, remained steady near record highs on Tuesday, with limited movement ahead of the anticipated interest rate decision by the U.S. Federal Reserve.

The Nifty 50 index experienced its narrowest trading range in two weeks, edging up 0.14% to close at 25,418.55. Similarly, the S&P BSE Sensex gained 0.11%, ending the session at 83,079.66.

Sameet Chavan, head of research at Angel One, told Reuters, "While the undertone of Indian markets is optimistic, there is some tentativeness among investors at all-time high levels ahead of the key Fed rate decision."

Market participants are divided on the magnitude of the expected rate cut, with a 67% probability of a 50 basis points reduction, up from 50% the previous week. This shift has increased the likelihood of foreign investors moving capital to emerging markets, including India, in pursuit of better returns.

However, concerns have arisen that the Fed may have initiated its easing cycle too late, potentially impacting the short-term direction of Indian stocks due to the influence on foreign inflows and the prospects for U.S.-dependent sectors such as IT and pharmaceuticals, according to three analysts.

On Tuesday, IT stocks rose 0.14%, while pharma dipped 0.3%. Eight out of 13 sectors posted gains, although small- and mid-caps declined by 0.37% and 0.13%, respectively.

In individual stock news, Bajaj Housing Finance surged 10%, extending its impressive 136% gain from its trading debut on Monday. Ola Electric, an e-scooter manufacturer, advanced 9.63% following "buy" ratings from BofA Securities and Goldman Sachs as they initiated coverage of the stock.

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