Sensex, Nifty trade flat as IT slide offsets Fed pause optimism

Indian stocks were little changed on Friday, as a decline in heavyweight IT stocks offset optimism on improving sentiment from the increased possibility of an interest rate halt from the US Federal Reserve.

The Nifty 50 index was down 0.01 percent at 18,632.90 as of 10:22 am, while the S&P BSE Sensex was down 0.04 percent at 62,823.02.

Seven out of 13 sectoral indices advanced. Realty added 1% after a sharp drop in the previous session, while IT fell 0.7%.

Wall Street and Asian stocks rose as the odds of an interest rate halt at the next Federal Reserve meeting on June 14 rose to 75 percent from 66 percent, after data showed that weekly jobless claims reached their highest level in a year and a half, indicating That the economy of cooling.

Investors are also awaiting key interest rate decisions from the European Central Bank and the Bank of Japan next week.

India’s central bank kept the repurchase rate at 6.50 percent for the second consecutive meeting on Thursday, but indicated that monetary conditions will remain tight to bring inflation down to the 4 percent target.

Despite profit-taking in interest rate-sensitive stocks after the RBI’s decision, analysts said the near-term outlook for the Nifty 50 index remained positive.

“We expect Nifty to gradually move towards all-time highs, supported by lower volatility, stable macroeconomic fundamentals and steady foreign buying,” said Siddhartha Kimka, Head of Retail Research at Motilal Oswal Financial Services.

Among individual stocks, One 97 Communications rose 4.91 percent to a 10-month high after global brokerage CLSA reiterated its “buy.”

Aether Industries jumped more than 7 percent to a record high after the specialty chemicals maker signed a licensing agreement with Saudi Aramco Technologies.

On the other hand, shares of the Indian Energy Stock Exchange fell 15 percent, after many analysts downgraded the shares, on the back of fears of market coupling.