Sensex, Nifty trade muted & mixed; Auto, Realty, Consumer, Media drag

Indian equity benchmark indices BSE Sensex and Nifty 50 opened in the red on Tuesday, as investors awaited a slew of data releases from around the world, along with key policy decision set to be announced by the US Federal Reserve on Wednesday.

At opening bell, the BSE Senesex was down 20 points, or 0.02 per cent, at 82,968, while the Nifty 50 was at 25,382, down 0.01 per cent.

Investors in India will keep an eye out for data release of Wholesale Price Index (WPI) inflation and manufacturing data for August, along with import and export data for August.

Foreign Institutional Investors (FIIs) sold shares worth Rs 1,634.98 crore in Monday’s session, while Domestic Institutional Investors (DIIs) bought shares worth Rs 754.09 crore.

Meanwhile, stocks in other asian markets wobbled on Tuesday while the dollar and US Treasury yields came under pressure, with just a day to go before the expected start of the Federal Reserve’s easing cycle that could see policymakers deliver an outsized rate cut.

Extended holidays in China and South Korea made for thin trading conditions, with investors focused on Wednesday’s Fed decision as odds have crept up in the past week in favour of a 50-basis-point rate cut.

Futures show that markets are now pricing in a 67 per cent chance that the Fed could ease rates by half a percentage point at the conclusion of its monetary policy meeting on Wednesday, after a slew of media reports revived the prospect of more aggressive easing.

For the year, markets have priced in roughly 120bps worth of easing by December.

Uncertainty over the scale of Wednesday’s likely Fed rate cut kept shares in Asia subdued, with MSCI’s broadest index of Asia-Pacific shares outside Japan up just 0.1 per cent.

Japan’s Nikkei fell 0.6 per cent, dragged by technology names as they tracked a decline on Wall Street.

US stock futures were mixed. S&P 500 futures and Nasdaq futures fell 0.12 per cent and 0.05 per cent, respectively, while EUROSTOXX 50 futures and FTSE futures tacked on more than 0.3 per cent each.

The Bank of England (BoE) and the Bank of Japan (BOJ) also meet this week to discuss monetary policy, where both central banks are seen keeping rates on hold.

Elsewhere in Asia, China’s stuttering economic recovery continued to weigh on sentiment, after data over the weekend showed the country’s industrial output growth slowed to a five-month low in August, while retail sales and new home prices weakened further.

Still, concerns over faltering Chinese demand for oil were overshadowed by the ongoing impact of Hurricane Francine on output in the US Gulf of Mexico, sending oil prices rising on Tuesday.

Brent crude futures rose 0.18 per cent to $72.89 a barrel, while US crude futures gained 0.43 per cent to $70.40 per barrel.

Spot gold eased 0.06 per cent to $2,580.51 an ounce.