Fed Holds Rates, but Indian Shares Climb Only Slightly

At 9:25 a.m. Thursday, the Sensex was up 168 points and the Nifty had gained 45, a modest lift after the US Federal Reserve kept interest rates unchanged overnight. The gains came despite crude oil near $114.50 a barrel and higher US bond yields, which continued to make investors wary. For now, the market’s rise is narrow, not a broad vote of confidence. ¹

That cautious start followed Wednesday’s losses: the Sensex fell 353 points to 73,246, and the Nifty dropped 51 points to 22,699. The Fed’s rate decision was expected, but two policymakers backed an increase, and investors raised the odds of a December hike. The US 10-year Treasury yield stood near 5.02 per cent. IT and pharma shares led Thursday’s early gains, while private banks and media stocks slipped. ^1,2

That $114.50 oil price matters especially for India, which imports much of its crude. Costlier oil can raise the country’s import bill, pressure the rupee and make fuel and transport more expensive. It can also squeeze companies that cannot quickly pass higher costs on to customers. High US yields may draw money toward dollar assets, making foreign investment in Indian shares less dependable. Even so, early trade was mixed rather than uniformly weak: mid-cap and small-cap indexes also edged higher. ^1,5

Those gains still face a clear test: analysts say the Nifty needs to cross 22,800 decisively to build momentum. That level has held the index back in recent sessions, while 22,500 has acted as an important support. Earnings reports due Thursday, including results from Trent, Asian Paints and Coal India, may steer individual shares. The next immediate signal will be whether buyers can keep the Nifty above 22,800 as oil, bond yields and Fed expectations weigh on sentiment. ^1,4