Markets held their ground Thursday even as the U.S. Federal Reserve delivered its first interest-rate increase since 2023, raising borrowing costs by 25 basis points and signalling at least one more hike this year, a move that rattled currencies and kept investors on edge across emerging markets.
The Nifty 50 closed at 23,270.60, up 53 points or 0.23 per cent, while the Sensex ended marginally lower at 74,314.59, down about 22 points. The Bank Nifty underperformed, declining 237 points to settle at 56,055.75, weighed by weakness in private-sector and PSU banks. The broader market, however, told a different story: the Nifty Midcap 100 gained 0.92 per cent, and the Nifty Smallcap 100 rose 0.76 per cent, outpacing the headline indices. Market breadth was supportive, with 358 stocks from the Nifty 500 universe closing in positive territory.
“…domestic markets remained volatile but ended higher, supported by value buying following the recent correction,” said Vinod Nair, Head of Research at Geojit Investments. “Investor sentiment is likely to stay cautious amid concerns over a possible broader rate-tightening cycle, driven by ongoing West Asia tensions and the risk of U.S. tariff.”
Sectoral performance mixed
Sectoral performance was mixed but tilted green. Pharma, healthcare, realty, auto, media, and metals were among the better performers, each gaining ground. Banking, FMCG, and oil and gas remained under pressure. Tata Group stocks drew attention again, outperforming the broader market amid growing expectations of a potential Tata Sons public listing after the RBI rejected the conglomerate’s proposal to exit the regulatory framework governing Core Investment Companies, a development the market has begun to read as a value-unlocking signal for listed Tata entities.
Dollar, yields keep investors cautious
The Fed decision, though widely anticipated, still stung. The dollar index climbed above the 100 mark to its highest level in over a month, and the U.S. 10-year Treasury yield hovered near 5 per cent, keeping foreign institutional investors in selling mode. The Indian rupee came under pressure, briefly slipping past the 96-per-dollar mark before recovering, with suspected Reserve Bank of India intervention offering some support. The currency is expected to remain under strain, with traders watching the 96–96.20 range and the immediate resistance at 96.25, according to Aamir Makda, Commodity and Currency Analyst at Choice Broking.
Brent crude eased to around $104 a barrel, offering modest relief to import-sensitive sectors, though analysts cautioned that a rebound toward the $108–$110 range could revive selling pressure. India VIX, a measure of near-term market anxiety, fell to around 12.25–12.29, suggesting some stabilisation even as macro headwinds linger.
Nifty faces resistance at 23,300–23,400
Technically, the Nifty formed a small-bodied candle with a long upper shadow, a pattern analysts read as indecision and selling pressure at higher levels. The index remains below its key short- and long-term moving averages, though the daily RSI has recovered from its recent low of 22.23 to around 31, pointing to tentative stabilisation. The 23,300–23,400 zone is the immediate resistance to watch; a decisive close above 23,400 could open the path to 23,550, while a break below 23,100 may intensify selling toward 22,950.
Markets likely to remain range-bound
Looking ahead, markets are expected to stay range-bound and selective. “…the market could bounce back to 23,500/75,000,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities, adding that further upside could lift indices toward 23,600 and 75,200, but only if benchmark support levels hold. Global bond yields, the dollar, and crude oil prices will remain the primary determinants of whether Thursday’s fragile recovery can sustain into the coming sessions.