Gift Nifty Surges as Asian Markets Rebound; Indian Indices Anticipate Big Gap-Up Ahead of US Fed Decision

Gift Nifty Surges as Asian Markets Rebound; Indian Indices Anticipate Big Gap-Up Ahead of US Fed Decision​

Indian equity indices, Sensex and Nifty, are positioned for a sharp morning rally on Wednesday. The optimism surrounding the upcoming US Federal Reserve policy decision and crucial technology earnings has bolstered global risk sentiment. GIFT Nifty signals a strong gap-up start, reversing the predominantly flat trading seen in Indian equities on Tuesday.

Market Outlook: Why A Gap Up Is Likely For Sensex and Nifty​

GIFT Nifty was observed at 24,230 around 8:15 am, registering a gain of 245 points or 1.02 percent. This indicates that the Nifty 50 is expected to open significantly above Tuesday's closing level of 23,985.35.

On Tuesday, Indian markets concluded largely range-bound. The Sensex had slipped by 69.86 points, or 0.09 percent, settling at 76,765.92. Similarly, the Nifty fell 10.60 points, or 0.04 percent, closing at 23,985.35. This subdued performance followed offsetting movements across sectors like IT, auto and realty versus energy, FMCG, metal and banking shares.

Asian Equities Recovering From Steep Selloff​

Asian markets showed a clear rebound on Wednesday after suffering heavy declines in the preceding session. Investors were focused keenly on the US Federal Reserve meeting and anticipated results from major technology companies.

MSCI's broadest index covering Asia-Pacific shares outside Japan rose by 0.8 percent, following a previous drop of 3.6 percent. South Korea's Kospi advanced over 1 percent, while Japan's Nikkei moved up approximately 1 percent. Nasdaq futures and European futures also signaled positive opens for the day.

Despite this recovery, lingering concerns remain regarding AI-related spending and chip sector valuations. These issues had previously triggered a broad selloff across technology stocks earlier in the week.

Crude Oil Rallies Amid Middle East Tensions​

Crude oil prices experienced a significant rally following renewed geopolitical tensions emanating from the Middle East. Brent crude futures climbed 3 percent, trading at $86.80 per barrel. US West Texas Intermediate crude saw an increase of more than 3 percent, reaching $81.95.

This price movement followed reports that the US military intercepted multiple ballistic missiles launched by Iran. The rally signals a heightened risk premium in commodity markets.

US Market Edges Higher Ahead of Fed Announcement​

US markets ended Tuesday on a mixed note, characterized by defensive heavyweight gains offsetting weaknesses in semiconductor stocks. The S&P 500 rose 0.21 percent, and the Dow Jones Industrial Average registered a gain of 1.03 percent. Conversely, the Nasdaq Composite slipped 0.22 percent as investors maintained caution regarding technology stocks.

The Federal Reserve is widely anticipated to hold interest rates steady later on Wednesday. Market pricing indicates a 71 percent probability of no change, contrasting with a 29 percent chance of a 25-basis-point rate hike.

Institutional Investors Boost Indian Markets​

Domestic institutional investors (DIIs) continued their streak of buying and provided strong support to the market, purchasing equities worth Rs 1,664 crore. Meanwhile, Foreign Institutional Investors (FIIs) successfully reversed a four-session selling trend on Tuesday by investing Rs 755 crore into Indian equities.

The coming hours are critical as investors await the US Federal Reserve's policy statement. They will also closely monitor quarterly results released by major global technology companies for guidance on the interest rate outlook.