Barometers trade sideways; Nifty ends above 23,250

The key equity benchmarks ended with sideways today, as investors assessed the US Federal Reserve?s latest policy decision and its implications for global liquidity. The Fed?s 25-basis-point rate hike, which took the benchmark rate to 3.75%-4%, kept risk appetite subdued, while a stronger dollar continued to weigh on Asian currencies, including the rupee.

The Fed?s indication of another rate hike in 2026 kept investors cautious, particularly across rate-sensitive and foreign-portfolio-investment-driven segments. However, selective buying in domestic sectors helped the Nifty close above the 23,250 mark. Market participants are likely to track currency movements, US bond yields and foreign fund flows for further direction.

The barometer index, the S&P BSE Sensex shed 21.86 points or 0.03% to 74,314.59. The Nifty 50 index added 53 points or 0.23% to 23,270.60.

In the broader market, the BSE 150 MidCap Index rose 0.07% and the BSE 250 SmallCap Index shed 0.13%. The market breadth was negative.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, dropped 7.82% to 12.14.

Among the sectoral indices, the Nifty Pharma index (up 1.66%), the Nifty Realty index (up 1.45%) and the Nifty Media index (up 1.19%) outperformed the Nifty 50 index.

Meanwhile, the Nifty Private Bank index (down 0.42%), the Nifty PSU Bank index (down 0.16%) and the Nifty Oil & Gas index (down 0.14%) underperformed the Nifty 50 index.

Trump Tariffs:

The US House of Representatives on Wednesday passed a Russia sanctions bill by 262-159 that gives President Donald Trump the power to impose tariffs of up to 100% on countries buying Russian oil and gas, directly targeting major importers such as India and China. The bill, which follows Senate approval on 7 August 2026, also expands sanctions on Russian officials, financial institutions and vessels linked to Russia's shadow fleet, while extending existing Iran sanctions by five years.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.13% to 7.064 compared with the previous session close of 7.055.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 95.9300 compared with its close of 95.9100 during the previous trading session.

MCX Gold futures for the 5 October 2026 settlement fell 0.49% to Rs 1,51,724.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.15% to 100.16.

The United States 10-year bond yield fell 0.38% to 4.985.

In the commodities market, Brent crude for the November 2026 settlement declined $2.34 or 2.21% to $103.49 a barrel.

Global Markets:

The US Dow Jones futures were up around 392 points on Thursday, pointing to a stronger opening for US equities after Wall Street ended sharply lower in the previous session following the Federal Reserve's policy decision. The Fed raised interest rates for the first time in three years and signaled that another rate hike could come before the end of 2026.

European equities advanced, while Asian equities ended mixed on Thursday as investors assessed the Fed's rate hike and easing crude oil prices.

Oil prices eased on signs that Saudi Arabia was working to restore crude flows following damage to its East-West pipeline. Reports that Saudi Arabia was arranging additional crude shipments via Oman helped reduce immediate concerns about supply disruptions.

The Saudi East-West pipeline, which provides an alternative route for moving crude away from the Persian Gulf, was damaged in a drone attack launched from Iraq, according to reports. Saudi Arabia had shut the pipeline following the attack, raising concerns about further pressure on an already-tight global oil market. The US administration subsequently indicated that operations would resume, easing some of the supply-risk premium in crude prices.

The gains in parts of Asia came after a heavy sell-off on Wall Street on Wednesday. The Dow Jones Industrial Average fell 631.21 points, or 1.21%, to 51,461.90, while the S&P 500 declined 0.45%. The Nasdaq Composite was broadly flat.

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. Sixteen of the 19 officials indicated 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 median forecast also showed the rate remaining at 4.1% in 2027.

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. Core PCE inflation was projected at 3.4%. At the same time, the Fed raised its 2026 GDP growth forecast to 2.3%, while the median unemployment-rate projection was 4.1%.

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