Indian equity markets opened higher on Thursday despite the US Federal Reserve raising interest rates by 25 basis points, with benchmark indices attempting to extend the previous session's recovery. According to latest reports, the BSE Sensex opened at 74,182.62 and was trading at 74,440.60 at 9:34 am, up 104.15 points or 0.14% from the previous close, while the Nifty 50 opened at 23,195.25 and was at 23,272.05, up 54.45 points or 0.23%. The Fed's unanimous decision marked its first increase in more than three years, with latest projections showing 16 of 18 policymakers expecting at least one more 25-basis-point rate hike by the end of the year.
The sectoral performance was broadly positive at the open, with Nifty Auto rising 0.94% and Nifty PSU Bank gaining 1.29%. Among sectoral indices, Nifty Metal rose 0.49%, Nifty Realty gained 0.74%, Nifty Financial Services 25/50 advanced 0.52% and Nifty FMCG rose 0.24%. However, Nifty IT fell 0.58%, Nifty Healthcare declined 0.27% and Nifty Consumer Durables slipped 0.23%. Among Sensex stocks, Eternal was the top gainer, rising 1.78%, followed by Bajaj Finance at 1.69% and BEL at 1.58%. Other notable performers included M&M (up 1.01%), Bajaj Finserv (up 1%), SBI (up 0.75%), and IndiGo (up 0.69%).
The broader market demonstrated stronger performance than benchmark indices, with Nifty 100 gaining 0.38%, Nifty 200 rising 0.42% and Nifty 500 advancing 0.47%. Nifty Midcap 50 gained 0.54%, Nifty Midcap 100 rose 0.55% and Nifty Smallcap 100 climbed 0.86%. India VIX fell 3.91% to 12.65, indicating lower volatility at the start of the session. Brent crude was trading at $105.72 a barrel, down 0.10%, while WTI crude was at $102.27, down 0.16%. Although crude prices eased slightly, they remain elevated amid continuing geopolitical and supply concerns, with high oil prices remaining a key risk for India as they can put pressure on inflation, the trade balance and the rupee.
IT stocks were among the key drags on the market, with Nifty IT down 0.58% at 9:36 am, as higher US interest rates could weigh on software demand and spending. Among Sensex stocks, HCLTech fell 0.90%, TCS declined 0.82%, Infosys slipped 0.57% and Tech Mahindra dropped 0.47%. HDFC Bank was also down 0.75%. Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that the Fed's decision to raise rates by 25bp was widely expected, but high bond yields could continue to weigh on equities. He pointed to the US 10-year Treasury yield around 5% as a concern for equity markets, while resilient US corporate earnings could provide some support. FIIs have been continuous sellers in India during the last six days and this trend is likely to continue, according to Vijayakumar.
On the technical front, the Nifty's immediate support remains around the 23,000-23,080 zone, while 23,300-23,450 is the key resistance area, according to Hitesh Tailor, Technical Research Analyst at Choice Broking. With the market coming off a recent correction and technical indicators still in oversold territory, a rebound remains possible. However, sustained high crude prices, elevated US bond yields and continued FII selling could limit the upside. Investors will also track the Fed's commentary on the future path of interest rates, as this could have a bigger impact on global liquidity and capital flows than the 25-basis-point hike itself. The market is likely to remain in consolidation mode until the Nifty decisively clears 23,300, with lower crude prices offering a supportive backdrop.
