Nifty 50 Finds Relief Buying, but Oil and Fed Risks Keep Markets Cautious
The Nifty 50 recovered in Wednesday’s session after falling to a five-month low in the previous trading session, with value buying lifting the benchmark index above 23,250. The rebound, however, remained vulnerable as investors kept an eye on elevated crude oil prices, foreign fund outflows and the US Federal Reserve’s policy decision due later in the day.
At 11:03 a.m. on September 16, the Nifty 50 was up 159.20 points, or 0.69%, at 23,277.80. The Sensex was higher by 483.15 points, or 0.65%, at 74,486.97. The market had opened higher following the sharp sell-off seen on Tuesday.
The recovery came a day after the Nifty fell 279.50 points, or 1.19%, to close at 23,118.60 on September 15. That was the index’s lowest closing level in five months. The Sensex dropped 777.94 points, or 1.04%, to 74,003.82.
Value buying lifts the benchmark
The early rebound reflected buying interest in stocks that had come under pressure during the recent market decline. Moneycontrol reported that value buying emerged after two consecutive sessions of losses.
Buying was visible across FMCG, auto and financial stocks. Nestle India and Tata Consumer Products gained more than 1% in early trade, while Reliance Industries and State Bank of India were also around 1% higher and provided support to the Nifty 50.
The Nifty FMCG index was among the stronger sectoral performers, while the Nifty Pharma index was lower during the morning session. Larsen & Toubro and Eternal were among the stocks weighing on the benchmark.
The rebound was not broad-based across the wider market. At 11:03 a.m., Moneycontrol reported 1,524 advancing shares against 2,113 declining shares, with 176 stocks unchanged.
Crude oil remains a key pressure point
Oil prices continued to be one of the main concerns for Indian equities.
Brent crude was trading around $108 a barrel on Wednesday after reaching a near four-month high in the previous session. Supply concerns linked to disruptions involving Saudi Arabia added to pressure on oil markets.
For India, sustained high crude prices can add pressure through the country’s import bill and inflation expectations. The concern has become more important for investors as global bond yields have also moved higher.
Reuters reported that Brent had risen to about $107.8 a barrel on Tuesday as geopolitical and supply concerns intensified. The rise in oil prices, alongside higher global bond yields, contributed to the previous session’s sell-off in Indian equities.
Foreign investors remain sellers
Foreign institutional investor activity also remained a concern.
Provisional exchange data showed that foreign institutional investors sold Indian equities worth ₹2,977.86 crore on Tuesday. Domestic institutional investors, by contrast, were net buyers, with inflows of ₹2,686 crore, according to data cited by Moneycontrol.
The foreign selling came as investors assessed the impact of higher oil prices, the direction of US interest rates and the relative attractiveness of emerging-market assets.
The rupee also remained under pressure. It closed at 95.9550 per US dollar on Tuesday, according to Reuters, after weakening amid higher oil prices and expectations surrounding US monetary policy.
Fed decision in focus
The US Federal Reserve’s policy decision was the other major event shaping investor sentiment.
Asian markets were cautious ahead of the decision, while US Treasury yields remained elevated. Reuters reported that the US 10-year Treasury yield briefly moved above 5% before easing back below that level.
Markets were widely pricing in a 25-basis-point increase, although the accompanying guidance was expected to be closely watched. The Fed’s assessment of inflation, growth and the path of future policy could influence global bond yields, the dollar and flows into emerging markets.
For Indian equities, the significance extends beyond the rate decision itself. Higher US yields can reduce the relative appeal of emerging-market assets and increase pressure on foreign capital flows.
Nifty’s technical picture remains cautious
Despite Wednesday’s recovery, analysts cited by Moneycontrol continued to describe the broader technical setup as defensive.
The Nifty had fallen below several important levels during the recent decline. Analysts were watching the 23,300 area for signs of stronger follow-through buying, while 23,000 remained an important downside level in the near-term market discussion.
Moneycontrol reported that technical analyst Vatsal Bhuva of LKP Securities viewed the Nifty and Sensex as being in oversold territory, leaving room for a technical rebound. He also cautioned that the broader trend remained bearish.
Separately, Pabitro Mukherjee of Bajaj Broking said a sustained move above 23,600 would be needed to indicate a pause in the prevailing downtrend, while a break lower could expose the index to the 23,000 and 22,800 levels. These are analyst assessments rather than guaranteed market outcomes.
What investors are watching next
The immediate focus is likely to remain on the Federal Reserve’s decision and accompanying guidance after Indian market hours.
Crude oil prices, foreign institutional flows, the rupee and US Treasury yields are also likely to remain important indicators for Indian equities.
For the Nifty 50, Wednesday’s recovery has so far provided relief after the previous session’s sharp decline, but the latest available market data do not establish a change in the broader trend. At 11:03 a.m., the index was trading at 23,277.80, up 0.69%.
The session remains underway, meaning the Nifty’s final closing level and the market’s reaction to the Fed decision were not yet available at the latest verification point.
