Muted Start for Indian Markets as Nifty Dips Near 26,320 Ahead of Fed Decision

Indian equity benchmarks are seen opening muted as Nifty futures on the NSE International Exchange traded about 0.04% lower at 26,321.50, hinting at a cautious start for the domestic market. The stumble comes as investors weigh the RBI’s rate relief and liquidity measures against anticipation of a policy move from the US Federal Reserve later this week.

Global cues were mixed as investors await the Fed decision. On the eve of the data, US indexes closed with modest gains: the Dow rose about 104 points to 47,954.99, the S&P 500 added roughly 13 points to 6,870.40, and the Nasdaq advanced around 73 points to 23,578.13. Ten-year US yields hovered slightly higher at around 4.146%, supporting a steady dollar index near 99.01 and a euro currency pair close to $1.1638.

Analysts say the market is likely to consolidate with a positive bias, aided by the RBI’s liquidity actions, steady domestic flows, and growing expectations of a potential US rate cut in the near term. In domestic equities, pockets of strength in midcaps and select beaten-down names are anticipated to provide lift to the broader market, though the near-term resistance around 26,350-26,500 keeps a cap on upside moves.

Market participants are keeping a close eye on possible breakouts beyond 26,350, which could pave the way toward 26,500-26,800 if buying on dips resumes. In the meantime, traders will be watching for cues from the Fed’s policy stance, RBI commentary, and upcoming macro data that could shape the next leg of the rally or pullback.

Overall, the mood remains cautious but constructive, with investors balancing local liquidity support against global rate expectations and the evolving risk backdrop.

Cover image source: Nifty at 26K, but why is your stock portfolio bleeding? 🔗

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