Markets Open Flat Amid Mixed Global Cues After US Fed's Hawkish Surprise; IT Drags, Banks Lend Support

Stock Market Today, June 18: The Indian equity market opened on a cautious note on Thursday, tracking mixed global cues after the US Federal Reserve struck a more hawkish tone than markets had anticipated. At 9:16 am, the Nifty 50 was trading at 24,097.35, up 11.65 points or 0.05 per cent, while the Sensex slipped 44.79 points to 77,110.83 in early trade.

IT Stocks Under Pressure After Fed Commentary

IT shares emerged as the biggest drag on the market after the Fed’s latest policy communication signalled a tougher stance on inflation. The Nifty IT index declined 1.60 per cent, with major constituents such as TCS, Infosys, HCLTech and Tech Mahindra trading in the red.

Investor sentiment in the sector weakened after the Fed’s updated dot plot indicated the possibility of a rate hike later this

year, pushing the US 10-year Treasury yield higher and triggering a sell-off in US equities overnight.

Fed policymakers struck a more hawkish tone than expected late Wednesday, with nine of 18 projecting at least one rate hike in 2026. Economists had anticipated far fewer, with Goldman Sachs saying it expected around three members to signal a hike. Goldman Sachs further flagged the Fed’s inflation outlook, noting the median projection for 2027 core PCE inflation (Q4/Q4) was set at 2.5%, above its 2.3% estimate.

Banks, FMCG and Auto Provide Support

Financial stocks helped limit losses. The Nifty Bank index rose 0.17 per cent to 57,682.20, while Nifty Financial Services gained 0.18 per cent. FMCG stocks also found favour, with the sector index advancing 0.38 per cent, supported by expectations of sustained domestic consumption demand.

The Nifty Auto index added 0.24 per cent, while PSU Bank stocks gained 0.31 per cent. Realty, consumer durables and oil & gas indices also traded in positive territory.

Broader Markets Continue To Outperform

Broader markets maintained their positive momentum, indicating healthy risk appetite among investors. The Nifty Smallcap 250 advanced 0.34 per cent, Nifty Smallcap 100 rose 0.23 per cent and Nifty MidSmallCap 400 gained 0.22 per cent.

The Nifty Microcap 250 emerged as one of the strongest performers, climbing 0.45 per cent, reflecting continued buying interest beyond large-cap stocks.

Market View: Lower Crude, Stable Rupee Key Positives

V K Vijayakumar, chief investment strategist at Geojit Investments, said the hawkish message from new Federal Reserve Chair Kevin Warsh surprised markets, especially given his earlier preference for rate cuts.

“The hawkish message sent by the new chief of the Fed, Kevin Warsh, was a bit unexpected since Warsh has been in favour of rate cuts and that was what President Trump wanted. But the persistently high inflation in the US left the FOMC with no choice but to send a hawkish message. The dot plot indicates a rate hike, possibly in October. The US 10-year bond yield rose to 4.46 per cent, leading to a sell-off in the US markets towards the close,” he said.

On domestic markets, Vijayakumar believes the impact of the Fed’s stance will be limited.

“Indian market will not be unduly influenced by the developments on the Fed rate front. In the near term, the market will remain resilient supported by the crash in Brent crude to around $78 levels. Rupee is stable at around 94.52 level. FII selling has tapered off as expected and yesterday FIIs turned buyers, though in limited quantity. Brent crude prices at around $78 level and stability in the rupee are big positives from the market perspective. Bank Nifty will remain strong with upward bias,” he added.

Nifty Key Levels To Watch

Anand James, chief market strategist at Geojit Investments Ltd, said, “Though yesterday’s rise lacked the momentum, there were no signs of a premature end to upsides for which we had pencilled in 24200 as the initial objective, followed by 24300-600. That said, expect bears to dominate early in the day, followed by an attack on 24000, but we will wait for slippage past 23800 to abandon upside hopes. Alternatively, pull back above 24060 will signal return to the upside trajectory.”