Markets clawed back some ground on Wednesday after the previous session’s sharp sell-off, but gains remained tentative as investors held back ahead of the US Federal Reserve’s policy decision due later in the night. Elevated crude oil prices, a weakening rupee and persistent selling in technology stocks kept sentiment fragile even as banking, FMCG and realty counters offered support.
The 50 settled at 23,217.60, up 99 points or 0.43 per cent, while the BSE closed at 74,336.45, gaining 332.63 points or 0.45 per cent. The recovery, however, lacked conviction, the Nifty Midcap 100 ended nearly flat, and the Nifty Smallcap 100 fell 0.18 per cent, marking its fifth consecutive session of losses. Market breadth remained weak, with the BSE advance-decline ratio recovering to 0.84 from the previous session’s panic reading of 0.36.
“Markets are likely to react to the outcome of the US Fed meeting and its commentary in early trade on Thursday,” said Ajit Mishra of Religare Broking, adding that the broader structure “remains weak” despite the day’s recovery.
Sectoral action was uneven. FMCG, PSU Banks, Realty and Financial Services were among the gainers, while IT, Pharma and Healthcare ended in the red following recent outperformance. SBI Life, HDFC Life and ITC led gains among Nifty 50 stocks, while TCS, Wipro, Infosys and Tech Mahindra bore the brunt of profit-booking. The Nifty has now declined over 1,650 points from its August high of 24,772.
Macro headwinds continued to weigh. Brent crude held near $108 per barrel amid ongoing Middle East tensions and concerns over supply disruptions, adding pressure on India’s import bill and inflation outlook. The rupee remained under strain near ₹95.95 per dollar, while persistent foreign institutional investor selling continued to act as an overhang on equities.
On the economic front, HDFC Securities’ August Bharat Barometer painted a mixed picture. While the external sector and banking system showed strength, with robust export growth, strong bank credit and deposit expansion, and positive FII inflows, domestic demand signals were softer. Auto registrations moderated, rural indicators stayed subdued, and GST collection growth slipped to high single digits. Industrial activity also showed signs of fatigue, with petroleum consumption contracting and steel consumption growth slowing.
“Easing crude oil prices and a largely priced-in US Fed rate hike improved investor sentiment,” said Vinod Nair of Geojit Investments, noting that strength in banking, FMCG and auto counters drove large-cap gains even as IT saw selective profit-booking.
Thursday’s session is likely to take its cue directly from the Fed’s rate decision and Chair Jerome Powell’s guidance on the rate trajectory. A balanced or dovish tone could support a broader recovery, with analysts pointing to the 23,400–23,600 zone as the next resistance band. A hawkish surprise, however, or a fresh spike in crude towards $110 could revive selling pressure, with 23,000–23,100 remaining the immediate support floor.