The S&P BSE Sensex ended marginally lower, declining 19.63 points or 0.03% to 74,294.46, while the Nifty 50 index tested the 23,346 level, falling 75.80 points or 0.33% to 23,346.40. According to Mint, the domestic benchmarks had opened higher in the previous session with the Sensex gaining 413.85 points to hit 74,728.44 and the Nifty rising 75.80 points to start trade at 23,321.20. The broader market outperformed the frontline indices, with the BSE 150 MidCap Index remaining largely flat after several weeks of outperformance, while the BSE 250 SmallCap Index also stayed steady. The market breadth was strong, with 2,423 shares rising and 1,505 shares falling on the BSE, while 238 shares remained unchanged. This performance comes after Wednesday's recovery when market benchmark indices rebounded around 0.7% after Tuesday's sharp selloff wiped out more than ₹9 lakh crore from Dalal Street.
Foreign portfolio investors (FPIs) emerged as net buyers in the cash market on September 18, purchasing shares worth ₹599.54 crore more than they sold, while domestic institutional investors (DIIs) also remained net buyers with net purchases of ₹1,019.69 crore, according to Mint. The partially convertible rupee opened at 95.75 against the US dollar and strengthened marginally to an intraday high of 95.71 during the first half of the session, but later came under pressure and ended at the day's low of 95.96, registering a decline of 7 paise from the previous close. The yield on India's 10-year benchmark federal paper rose 0.41% to 7.084 compared with the previous session close of 7.055. The US Dollar Index (DXY) was up 0.08% to 100.33, while the United States 10-year bond yield fell 0.04% to 5.002, providing some relief from the previous session's pressure.
The US Federal Reserve raised interest rates by 25 basis points on Wednesday, September 16, bringing the target range on the federal funds rate to 3.75% to 4% - the first rate hike since 2023. According to market experts, while the Fed hike is negative for Indian stocks, most of the impact is already discounted by the market. As per V K Vijayakumar, Chief Investment Strategist at Geojit Investments, "A 25 bp rate hike is largely discounted by the market. Therefore, an immediate knee-jerk negative reaction in the market is unlikely. A rate hike today and reassurance from the Fed to firmly handle the stubborn inflation may even give confidence to the market, preventing a sell-off." However, Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, believes "For India, higher US interest rates could strengthen the dollar, put pressure on the rupee and weigh on foreign investment flows into emerging markets." The Fed's updated projections point to another rate increase in 2026, with sixteen of the 19 officials indicating support for at least one further hike this year, while the median projection put the policy rate at 4.1% at the end of 2026.
The Nifty Auto index jumped 1% to 27,162.55, marking the second consecutive trading session of gains with a 1.52% rise over two sessions. According to Business Standard, Sona BLW Precision Forgings surged 2.51%, Samvardhana Motherson International rose 1.97%, TVS Motor Company gained 1.57%, Hero MotoCorp advanced 1.51%, Bharat Forge increased 1.37%, Mahindra & Mahindra rose 1.02%, Maruti Suzuki India climbed 0.97%, Uno Minda gained 0.86%, Ashok Leyland rose 0.86%, and Bosch advanced 0.55%. The sustained buying interest in auto shares comes as the sector benefits from selective domestic demand and positive sentiment around the industry's growth prospects. Market participants are likely to track currency movements, US bond yields and foreign fund flows for further direction, with the Fed's indication of another rate hike in 2026 likely to keep investors cautious in rate-sensitive segments.
The Fed's rate hike triggered a sharp global market selloff, with the Dow Jones Industrial Average falling 95.40 points or 0.18% to 51,682.64 on Friday. According to Mint, the S&P 500 rose 12.74 points or 0.17% to 7,650.50, while the Nasdaq Composite advanced 104.25 points or 0.40% to 26,522.55. In Asian markets, South Korea's Kospi closed at 6,894.23, down 15.68 points or 0.23% from the previous week's close of 6,909.91, though it witnessed sharp swings during the five trading sessions. Japan's Nikkei 225 advanced 1.52% with Kioxia Holdings Corp emerging as the top performer, surging 9.40% to 54,570.00. Taiwan's benchmark stock index extended its gains, climbing above the 47,000-point level with the TAIEX ending at 47,180.75, rising 892.75 points or 1.93% for the week. Crude oil prices declined for the third straight session on Friday, with US West Texas Intermediate (WTI) crude futures dropping 1.6% to settle at $100.30 a barrel, while Brent crude fell 0.9% to close at $103.87 a barrel.
