New Delhi [India], September 21 (ANI): Snapping two-day gains, Indian stocks traded a tad lower but with a positive bias on Wednesday morning as investors await the actual degree of rate hike by the US Federal Reserve, if at all, for fresh cues.

A two-day monetary policy meeting of the US central bank commenced on Tuesday, and the outcome will be announced today late in the evening.

At 9.21 am, Sensex traded at 59,705.32, down just 14.42 points or 0.024 per cent, whereas Nifty traded at 17,812.85 points, down 3.40 points or 0.019 per cent.

Among the Nifty 50 companies, 31 advanced and 19 declined at the time of writing this report, National Stock Exchange data showed.

"The overarching trend in the market now is India's outperformance vis-a-vis other markets, particularly the mother market US. The big question is whether this outperformance can sustain. This is possible since the Indian economy and corporate earnings are outperforming," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

However, the risk is the high valuation of Indian stocks, Vijayakumar said.

"If there is a sharp cut in the US market on recession fears triggered by sharp rate hikes or if the Ukraine war escalates, as some fear now, the Indian market too will be impacted."This morning, other Asian markets too traded on a negative note as investors await for the outcome of the US Fed.

Consumer inflation in the US declined marginally in August to 8.3 per cent from 8.5 per cent in July but is way above the 2 per cent goal. Several senior top bankers recently said that another interest rate hike is imminent.

Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby enabling the inflation rate to decline.

The US central bank is expected to raise the rates by another 50-75 basis points. Already it has increased rates by 150 basis points.

The US Federal Reserve will be single-mindedly focused on inflation until it is lowered closer to the 2 per cent target on a sustained basis, said global business intelligence solution firm SP Global Market Intelligence. It is expected to raise the rates by another 75 basis points to a range of 3 per cent to 3.25 per cent -- which would be the third consecutive increase of that magnitude.

US Federal Reserve Governor Christopher J. Waller recently gave a hint the decision at the monetary policy meeting will be "straightforward" and the central bank will continue to fight inflation aggressively.

Meanwhile, RBI too will sit for a monetary policy review later this month and further rate hikes are highly expected. Morgan Stanley expects a 50 basis points hike by the RBI.

As per schedule, the next three-day monetary policy meeting will be held during September 28-30. (ANI)