BENGALURU: Indian shares held ground near all-time highs on Tuesday, with traders expecting marginal moves ahead of the U.S. Federal Reserve’s widely expected interest rate cut a day later.

The Nifty 50 index had dipped 0.05% at 25,371.2 points, while the S&P BSE Sensex had slipped 0.06% at 82,939.94, as of 10:16 a.m. IST. They hit record highs on Monday.

While the Fed is widely expected to cut rates on Wednesday, after Indian markets close, the uncertainty is over the size of the cut – by 25 basis points or 50 basis points.

“Markets are in a wait-and-watch mood in anticipation of the Fed rate action tomorrow,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

The odds of a 50-bps cut have climbed recently – to 67% from 50% last week – which raises the chances of foreign investors shifting funds to emerging markets such as India in search of higher returns.

However, the likelihood of a bigger rate cut has also prompted fears that the Fed may have started its easing cycle a little too late.

Metals, energy boost Indian shares to record highs

“Rate cuts are a positive for markets. But if the cut is due to a sharply slowing U.S. economy, then the market is unlikely to treat it as a positive,” Vijayakumar said.

Ten of the 13 major sectors declined on the day, while the small- and mid-caps dipped 0.5%each.

Consumer stocks, which dropped 1.4% over the last two sessions, gained 0.3% on the day.

Among individual stocks, Bajaj Housing Finance jumped 8% after the housing finance company surged 136% in its trading debut on Monday.

E-scooter maker Ola Electric advanced 4% after BofA Securities and Goldman Sachs initiated coverage with “buy” ratings.

Panacea Biotech gained 5% after settling a marketing-related patent infringement with Sanofi India.

Torrent Power rose 5% after a deal to build a solar, wind or solar-wind hybrid project.