Indian benchmark indices closed higher on Wednesday with the BSE Sensex rising 53.73 points or 0.07% to close at 74,390.18 and the NSE Nifty50 adding 72.35 points or 0.31% to settle at 23,289.95 at 3:30 PM. According to market reports, the Sensex had soared more than 300 points during the opening bell and traded above 74,300, while the NSE Nifty50 jumped a little over 100 points to cross 23,200 as of 9:15 AM. The closing performance was stronger than the muted start indicated by GIFT Nifty, which was quoted at 23,211.50, down 16 points, suggesting a tepid opening for domestic equities. In the broader market, the BSE 150 MidCap Index jumped 0.85% and the BSE 250 SmallCap Index rose 0.72%, with market breadth remaining positive as 2,575 shares rose and 1,574 shares fell on the BSE. The Nifty traded below the 23,300 level amid cautious sentiment over the stronger dollar and further rate-hike signals.
Market participants are closely watching the US Federal Reserve's policy decision, with expectations of a rate hike adding to the cautious mood. As reported by market sources, the Federal Reserve raised its benchmark federal funds target range by 25 basis points to 3.75%-4%, marking its first rate increase since July 2023. The decision reflected the Fed's concern that inflation remains elevated despite resilient economic activity and labour-market conditions. Fed Chair Kevin Warsh said inflation was still too high and that monetary policy would remain focused on preventing higher energy prices from generating broader inflationary effects. 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 central bank raised its inflation outlook, with the median forecast for headline PCE inflation at 3.7% for 2026, well above its 2% target, while the Fed raised its 2026 GDP growth forecast to 2.3%.
Despite the positive closing, market experts caution that recovery could remain fragile amid persistent headwinds. Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, noted that recovery in the market may remain fragile as Brent crude hovers near USD 108 a barrel and elevated global bond yields continue to weigh on risk appetite. The Federal Reserve's policy decision tonight is expected to be the key market trigger, with Radhakrishnan adding that "Hawkish commentary could strengthen the dollar and place additional pressure on global equities, the rupee and foreign flows, while balanced guidance may support a relief rally."
Foreign Institutional Investors (FIIs) continued their selling pressure, offloading equities worth ₹2,977.86 crore on Tuesday, according to exchange data. The selling came as benchmark indices recorded a sharp decline, with the Sensex tumbling 777.94 points, or 1.04% on Tuesday to settle at a three-month low of 74,003.82, while the Nifty dropped 279.50 points, or 1.19% to end at 23,118.60, its lowest closing level since April 6. From a technical perspective, sustained selling emerged after the market opened higher, with the Nifty and Sensex falling more than 450 points and 1,400 points, respectively, from their day's highs. Shrikant Chouhan, Head of Equity Research at Kotak Securities, said the correction is likely to persist as long as the Nifty remains below 23,300 and the Sensex below 74,400, with potential downside targets of 23,000 and 73,700 respectively.
HDFC Life emerged as the top gainer, rising 5.37%, followed by SBI Life at 3.80% and Dr Reddy's Lab at 2.96%. Other notable gainers included Bharat Electronics (up 2.55%) and Indigo (up 2.42%). On the downside, ONGC declined 1.64%, Bajaj Auto fell 0.98%, Titan Company dropped 0.92%, HDFC Bank was down 0.70%, and Infosys declined 0.62%. In corporate developments, Emami added 3.13% after announcing a share buyback through the open market at a maximum price of ₹475 per equity share, aggregating up to ₹282 crore. Neogen Chemicals jumped 5.75% following the successful completion of its qualified institutions placement (QIP) for approximately ₹599.99 crore. Tata Motors advanced 1.72% after announcing a price increase of up to 1% on its commercial vehicles effective October 1, 2026. Precision Wires India was up 0.68% after commencing trial production of copper cathodes at its Gujarat facility.
