Mid-day Mood: Indices under pressure as caution prevails before FOMC outcome

Stock Market Today

The Indian benchmark indices mirrored the weak trend across global markets and opened lower on September 20. However, sharp cuts in index heavyweight stocks RIL and HDFC Bank pulled the benchmarks further down as of afternoon trade, with the Nifty 50 slipping below the 20,000 mark.

At 11.12 am, the Sensex was down 618.23 points or 0.91 percent at 66,978.61, and the Nifty was down 177.20 points or 0.88 percent at 19,956.10. The slump in shares of RIL and HDFC Bank collectively contributed around 140 points to the Nifty 50's near 175-point decline.

The overall market breadth also titled in favour of declines as the fall in about 1,755 stocks, outnumbered the gains in 1,242 shares while 100 remained unchanged.

Meanwhile, caution also persisted in the run-up to the US Federal Reserve's rate decision, due for a release later today, a trend that weighed across most global markets.

"The sideways trend in the market is expected to persist in the upcoming trading sessions. This is attributed to the anticipation of the outcome of the US Federal Reserve meeting, which is a significant event that can impact global financial markets," said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.

"Factors such as increasing US bond yields, rupee weakness, a surge in crude oil prices, and selling by foreign institutional investors (FIIs) further contributed to the challenges faced by our markets," highlighted Parth Nyati, Founder at Tradingo.

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Shah also highlighted the consolidation in the Nifty within a broad range in the recent sessions, with notable call writing activity observed at higher levels. "This suggests that market participants are cautious and have been selling call options to hedge against potential downward movements," he said.

Meanwhile, Nyati sees immediate support levels for Nifty and Sensex at 19,900 and 66,900, respectively. "If these levels are breached, we may witness additional profit booking, potentially leading towards 19,640 for Nifty and 66,000 for Sensex," he added.

Stocks and sectors

The spotlight in today's session fell upon HDFC Bank which slumped nearly 4 percent on the back of concerns over potential margin pressure and the asset quality post its mega-merger. These concerns also triggered a slew of downward revisions in price targets by a few brokerages, denting sentiment for the stock.

Dragged by the sharp decline in HDFC Bank along with losses in Kotak Mahindra Bank, ICICI Bank and Federal Bank, the Nifty Bank index also dropped a percent.

Reliance Industries was another major laggard on the Nifty 50 list, as it dropped around 3 percent. A block deal involving 1.9 crore shares of RIL or 0.3 percent equity also took place on the exchanges, worth around Rs 4,563 crore. Moneycontrol could not immediately identify the buyers and sellers involved in the transaction.

Other major sectors like automobile, information technology, metals, pharma, FMCG and infra also struggled with losses.

Within the broader market, intense pressure was seen among smallcaps, with the Nifty Smallcap 100 falling around a percent while the Nifty Midcap 100 fared better, marginally down 0.2 percent.

Among the outliers, shares of Blue Star surged to a 52-week high after the company floated a qualified institutional placement to pare some of its debt and fund growth opportunities.

A slew of order wins for NBCC, BL Kashyap and Sons and Ashoka Buildcon also triggered a spike in these counters.

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