Indian Equities Rise on IT Strength as Investors Await Federal Reserve Decision
Indian benchmark indices advanced on Wednesday led by technology stocks, as market participants balanced optimism ahead of the US Federal Reserve’s policy decision against rising crude oil prices driven by Middle East tensions.
Indian benchmark indices opened higher on Wednesday, with the Nifty 50 climbing 0.77% to 24,170.40 and the Sensex advancing 0.88% to 77,442.68 by 9:16 IST. The technology sector spearheaded the rally, pushing the Nifty IT index up 2.3% and extending its three-day gain to 8.4%.
Market breadth was broadly positive, with 13 of 16 major sectoral indices trading higher and mid-cap and small-cap segments each rising 0.6%. Investors are positioning themselves ahead of the US Federal Reserve’s interest rate decision, widely expecting the central bank to maintain its current policy stance despite lingering inflationary pressures.
Geopolitical risks also influenced early trading sentiment. Renewed military activity in the Middle East heightened concerns over global supply stability, driving crude oil prices up by 4.3%.
Technically, the Nifty 50 faces immediate support at the 23,800 level, with an upside testing range between 24,200 and 24,350. The India VIX remains subdued, indicating limited near-term risk, though a dip toward the lower end of its 11 to 16 range could trigger profit booking before the index challenges 24,600.
While the technology sector shows signs of an established short-term bottom, the Nifty Bank index ended in negative territory. Analysts note strong immediate support for the banking index at 56,000, suggesting a sideways short-term trend unless it breaks above 58,000.
Derivatives Strategy
In the futures and options segment, Jay Thakkar of ICICI Securities highlighted favorable risk-reward setups in Godrej Properties, LTM, and GAIL futures. The realty sector has seen sustained short covering, with Godrej Properties trading above its maximum pain level of 2,000, which now acts as near-term support alongside significant put additions at the 2,000 and 2,100 strikes.
LTM futures recently broke out of an inverse head and shoulders pattern, supported by short covering and put accumulation at the 4,000 and 4,200 strikes. Analysts project the stock could test the 4,500 to 4,600 range in the near term, as it trades well above its maximum pain level of 4,150.
GAIL futures have been consolidating within a 166 to 176 range and are showing signs of an upside breakout. With the stock trading above its maximum pain level of 175, clearing the 180 resistance could trigger call unwinding, potentially driving prices toward 190.
