Indian shares oscillated between gains and losses before eventually closing flat on Wednesday, as investors processed hawkish remarks from the Federal Reserve and heightened geopolitical tensions in Europe and the Middle East.
The dollar exhibited instability while Treasury yields increased, reflecting indications of a sluggish U.S. economic performance in the second quarter.
May's U.S. industrial production and manufacturing output exceeded expectations. However, retail sales saw meager growth, and data from April was revised significantly lower. This revision caused Treasury yields to decline and bolstered investor confidence in the likelihood of two interest rate hikes this year.
Despite this, several Federal Reserve officials emphasized on Tuesday the central bank’s commitment to data-driven decision-making.
In his inaugural economic address, St. Louis Federal Reserve Bank President Alberto Musalem stated that the U.S. central bank should only consider cutting interest rates after observing "months, and more likely quarters," of decreasing inflation.
Market indices saw significant movements, with the Nifty50 and Sensex both reaching new record highs for the fourth consecutive session before closing roughly unchanged.
The 30-share Sensex concluded the session with a modest gain of 36.45 points, settling at 77,337.59. Conversely, the broad NSE Nifty index edged down by 41.90 points, marking a 0.18 percent decrease to close at 23,516.
The private banking sector experienced notable gains, with Kotak Mahindra Bank, IndusInd Bank, ICICI Bank, HDFC Bank, and Axis Bank advancing by 1-3 percent.
Conversely, on the losing end, BPCL, Bajaj Auto, Bharti Airtel, Maruti Suzuki India, and Titan Company saw declines ranging from 2-4 percent.
