Wall Street: Indices lose over 1% before Fed minutes

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Mumbai: Indian equities dropped over 1% on Wednesday, tracking the weak overnight closing on Wall Street, as traders cut their bets ahead of the release of the US Federal Reserve’s December meeting minutes after trading hours in Mumbai. Analysts said concerns over elevated valuations of domestic stocks are also keeping investors on the edge.

The BSE Sensex fell 636 points, or 1.04%, to close at 60,657. NSE’s Nifty declined 189 points or 1.04% to end at 18,042.

“There is a lot of discomfort about market valuations at current levels, while foreign investors are also not bullish,” said Siddarth Bhamre, head-research,

Broking. “It may not be a good idea to make aggressive purchases at current levels.”

Foreign portfolio investors net sold shares worth ₹2,620 crore on Wednesday, while their domestic counterparts were buyers to the tune of ₹773 crore, according to provisional BSE data.

Analysts said 18,000 will be a key support for the Nifty.

“Nifty has closed near an important support zone of 18,050-18,000, which is also acting as an immediate demand zone to buy any dip,” said Pravesh Gour, senior technical analyst at

. “Below this, we may see some weakness towards the 100-DMA (day moving average) of 17,900.”

Asian markets ended mixed on Wednesday ahead of the release of Fed’s December meeting minutes. Investors will parse the minutes for hints on the US central bank’s policy actions. In December, the Fed raised a key policy rate by 50 basis points and signalled that interest rates could stay higher for a longer period.
Another event that investors will watch closely is the release of the December jobs data on Friday after trading hours. The strength of the jobs data will be a key factor for the Fed to decide on interest rates. If the job data shows signs of weakness, investors could see it as a sign that the Fed’s rate-hiking spree might be coming to an end.

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