Benchmark indices ended higher on Wednesday, recovering from a two-day slide as gains in banking, FMCG and other heavyweight stocks lifted sentiment. Payment firms also gained after the new merchant discount rate (MDR) on select UPI transactions, while easing crude prices supported the market.
The BSE Sensex opened at 74,249.31 and closed at 74,336.45, rising 332.63 points, or 0.45%, from the previous close. The Nifty 50 opened at 23,201.60 and ended at 23,217.60, gaining 99 points, or 0.43%.
The rebound came a day after the Sensex fell 777.94 points and the Nifty declined 279.50 points. However, gains remained limited as crude oil prices stayed elevated and investors awaited the US Federal Reserve’s rate decision.
Twelve of the 16 major sectoral indices ended higher. Nifty FMCG was the top sectoral gainer, rising 1.63%, followed by Nifty PSU Bank, which gained 1.44%. Nifty Private Bank rose 0.79%, while Nifty Financial Services 25/50 advanced 0.70%.
Nifty Auto gained 0.51%, Nifty Metal rose 0.55%, Nifty Realty climbed 0.99% and Nifty Oil & Gas advanced 0.70%. Nifty Media and Nifty Financial Services Ex-Bank also ended higher, gaining 0.74% and 0.33%, respectively.
IT stocks were a key drag, with Nifty IT falling 1.58%. Nifty MidSmall IT & Telecom declined 1.05%, while Nifty Chemicals slipped 0.03%.
Nifty Pharma fell 0.16% and Nifty Healthcare declined 0.15%.
IT stocks, which had rallied sharply in the previous session, saw profit booking on Wednesday.
TCS was the biggest Sensex loser, falling 2.60%. Infosys declined 1.43%, Tech Mahindra fell 1.26% and HCLTech slipped 0.31%.
ITC was the top Sensex gainer, rising 2.46%, followed by SBI, which gained 2.24%. Axis Bank rose 1.93%, Trent gained 1.51% and M&M climbed 1.45%.
BEL rose 1.42%, Titan gained 1.34%, Kotak Mahindra Bank advanced 1.29%, Hindustan Unilever rose 1.21% and Sun Pharma gained 1.01%.
Among the other major gainers, Adani Ports rose 0.85%, HDFC Bank gained 0.75%, ICICI Bank rose 0.52% and Reliance Industries advanced 0.44%.
On the losing side, Bajaj Finance fell 0.12%, UltraTech Cement declined 0.28%, Tata Steel slipped 0.30%, Maruti fell 0.61%, IndiGo declined 0.70%, L&T dropped 0.79%, NTPC fell 0.91% and Bajaj Finserv declined 0.99%.
Payment companies remained in focus after the new 0.4% merchant discount rate on select person-to-merchant UPI transactions above Rs 2,000, which will come into effect from October 15.
Paytm gained around 3.5%, while One Mobikwik and Yes Bank also rose sharply during the session. Pine Labs, however, reversed its early gains and traded lower.
“We view this as structurally positive, long-awaited monetisation event for UPI-heavy banks and third-party application providers in India’s UPI ecosystem,” said Kunal Shah, analyst at Citi Research.
The broader market did not participate fully in the rebound. The Nifty 100 rose 0.37%, Nifty 200 gained 0.29% and Nifty 500 advanced 0.24%.
The Nifty Midcap 50 was almost flat, rising 0.02%, while the Nifty Midcap 100 slipped 0.01%. The Nifty Smallcap 100 declined 0.18%.
India VIX fell 1.93% to 13.17, indicating some moderation in market volatility.
Crude oil prices eased on Wednesday but remained elevated. WTI crude was trading at $103.72, down 1.99%, while Brent crude was at $107.63, down 1.03%.
Investors continued to track supply risks linked to the Middle East conflict. At the same time, the US Federal Reserve’s policy decision remained the key global event for markets.
A potential US rate hike could keep the dollar and global bond yields elevated, putting pressure on emerging-market currencies and capital flows.
Vinod Nair, Head of Research, Geojit Investments Limited, said easing crude prices and expectations around the Fed decision supported the recovery in Indian equities.
“Equities advanced in tandem with regional markets as easing crude oil prices and a largely priced-in U.S. Fed rate hike improved investor sentiment. The constructive mood was further reinforced by a moderation in Japanese bond yields ahead of the BoJ’s policy decision, supporting risk appetite across Asia,” Nair said.
He said large-cap stocks led the gains, particularly banking, FMCG and automobile counters, while IT stocks saw selective profit booking after their recent outperformance.
“Investors now await the Fed Chair’s commentary for deeper insight into the future rate trajectory, with the guidance expected to influence global liquidity conditions, capital flows and the near-term direction of financial markets,” Nair said.
The market’s next move will therefore depend on the Fed’s guidance, crude oil prices and the flow of foreign and domestic institutional money after the recent correction.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)