Sensex, Nifty open lower ahead of Fed rate decision; Apollo Hospitals jumps 6%

Benchmark stock market indices opened lower after gaining sharply in the previous trading session. While Donald Trump’s victory in the US elections supported the domestic indices, the upcoming Fed rate decision has kept traders cautious.
The S&P BSE Sensex was down 107.15 points to 80,270.98 at 9:21 am, while the NSE Nifty50 fell 47.25 points to trade at 24,436.80.
Other broader market indices were mixed, with some trading in the green and some in the red.
IT stocks continued to gain but were not enough to offset losses in banking and financial services.
The top five gainers on the Nifty50 were Apollo Hospitals, Tata Steel, HCLTech, TCS and Wipro. On the other hand, the top losers were Hindalco, Adani Enterprises, Power Grid, BEL and BPCL.
Shares of Apollo Hospitals jumped over 6% after reporting strong revenue and net profit in the second quarter.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The Trump victory is turning out to be more potentially transformative than thought earlier. With the Congress and the Senate coming under Republican control and President Trump exercising power without bothering about another term in office, hugely transformational decisions are possible in the months following Trump’s assumption of office.”
“These decisions may turn out to be both good and bad. His pro- business initiative of ‘America First’ can strengthen the American economy. But if he walks his talk and imposes a 60% tariff on Chinese imports and 10 to 20% tariff on imports from other countries, that would trigger inflation and jeopardise the Fed’s policy of containing inflation, necessitating a rethink of the Fed’s present policy of rate cut. This has the potential to negatively impact global stock markets,” Vijayakumar explained.
He noted thtat it is important to understand that even though Trump’s anti-China policy has positive implications for India, Trump has been critical of ‘India’s high tariffs’ and “won’t hesitate to impose tariffs on India’s exports to the US”.

“The ‘Trump trade’ which has sharply lifted the US markets is unlikely to have a similar positive impact in India since Indian market valuations are high and there are headwinds of an earnings slowdown. Investors should stick to quality and value during this period of euphoria and uncertainty.”