Indian stocks extend losses, await US Fed policy outcome for fresh cues

New Delhi [India]: Indian stock indices extended losses from the previous session and edged sharply lower on Wednesday, tracking weak overnight US markets coupled with rising global crude oil prices amid the strengthening of the US dollar.

Sensex was at 67,213.98 points, down 382.87 points or 0.57 per cent, and Nifty was at 20,024.60 points, down 108.70 points or 0.54 per cent at the opening bell. India stock exchanges were closed yesterday for trading on the occasion of Ganesh Chaturthi.

On Monday, Indian stock indices closed in the red, with the benchmarks largely witnessing profit booking. Investors may have taken some money off the table after the indices hit their fresh highs last week.

“There are too many challenges for the market in the near term. Brent crude at $94, the dollar index above 105, the 2-yr US bond yield at 5.09 per cent and the INR at record lows against the dollar are strong headwinds,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“The straining of relations between India and Canada is unlikely to have any lasting impact on the market,” he said.

Going ahead into this week, investors are likely to tread carefully as the U.S. Federal Reserve’s meeting scheduled Tuesday-Wednesday, its outcome due likely this midnight, will be closely monitored.

The US central bank in its July meeting raised its benchmark interest rate by 25 basis points, the highest in the past 22 years at 5.25-5.5 per cent, in its fight against soaring inflation and bringing it back to the 2 per cent target.