Nifty, Sensex Likely to Open Lower Ahead of Fed Decision Later Today

Pre-Market Update at 7:40 AM: Indian equity benchmarks are likely to open slightly lower on Wednesday, December 10, as investors remain cautious ahead of the US Federal Reserve’s policy decision later today. Both the Sensex and Nifty 50 are expected to stay range-bound amid mixed global cues and persistent uncertainty around interest rates.

Early indicators were weak, with Gift Nifty trading near the 25,902 level, around 29 points lower, pointing to a soft start for domestic markets. Asian markets were largely range-bound but traded in the green, as participants awaited clarity on the Federal Reserve’s final rate decision of the year.

India–US trade talks are also in focus, with both countries beginning a three-day round of negotiations today on the initial phase of a proposed bilateral trade agreement. A US delegation led by Deputy USTR Rick Switzer and India deal negotiator Brendan Lynch arrived in New Delhi earlier this week. The discussions have raised hopes of reviving the long-pending pact, whose delay has resulted in higher tariffs on Indian exports and concerns over the strategic partnership amid rising competition with China.

Institutional activity showed a divergence in flows. On Tuesday, December 9, Foreign Institutional Investors were net sellers, offloading equities worth Rs 3,760.08 crore. In contrast, Domestic Institutional Investors remained supportive, buying shares worth Rs 6,224.89 crore, marking their 33rd straight session of net inflows.

Indian markets closed lower on Tuesday, dragged down by heavyweight stocks such as ICICI Bank and HDFC Bank. The Nifty 50 fell 120.90 points, or 0.47 per cent, to settle at 25,839.65, while the Sensex declined 436.41 points, or 0.51 per cent, to 84,666.28. Sentiment stayed cautious ahead of the Fed decision and uncertainty around the India–US trade deal, even as India VIX eased by 1.5 per cent.

On the sectoral front, Nifty PSU Bank emerged as the top gainer, rising 1.29 per cent. Realty, Media and Energy indices also ended higher. However, IT, Auto and Pharma stocks closed in the red. Broader markets outperformed, with the Nifty Midcap 100 gaining 0.32 per cent and the Smallcap 100 advancing 1.14 per cent, although the Small-Cap index remains under pressure in 2025, down over 8 per cent year-to-date.

Overnight, US markets were mostly lower as investors positioned themselves ahead of the Federal Reserve’s policy announcement. The Dow Jones Industrial Average slipped 179.03 points, or 0.38 per cent, to 47,560.29. The S&P 500 edged down 0.09 per cent to 6,840.51, while the Nasdaq Composite gained 0.13 per cent to close at 23,576.49.

Market attention is firmly on the Federal Reserve’s policy outcome due later today. While a 25-basis-point rate cut is widely expected, investors are wary of any hawkish signals or dissent within the policy committee.

In currency and bond markets, the US dollar strengthened modestly, supported by a rise in Treasury yields after fresh labour data showed a slight increase in job openings in October. The dollar index rose 0.15 per cent to 99.22, while the 10-year US Treasury yield climbed 1.4 basis points to 4.186 per cent.

Commodities saw mixed trends. Gold prices advanced as traders remained optimistic ahead of the Fed decision, with spot gold rising 0.6 per cent to USD 4,211.77 per ounce and February futures settling 0.4 per cent higher at USD 4,236.20 per ounce. Silver surged to a record USD 60 per ounce amid tightening supply conditions. Meanwhile, crude oil prices extended losses for a second session, with Brent crude falling 0.88 per cent to USD 61.94 per barrel and US WTI declining 1.07 per cent to USD 58.25 per barrel, weighed down by supply concerns and geopolitical developments.

For today, Sammaan Capital and Bandhan Bank will remain on the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.