Indian stocks rebound over 1% as Fed pause lifts sentiment, but rupee and oil pressures linger

Indian equity benchmarks rallied Thursday, with the Nifty rising 1.05% to 22,936.77 and the Sensex gaining 1.2% to 74,151.04, reclaiming the key 22,900 level.

Market Rally

Fresh buying in the second half of the session lifted the broader market, a trend noted by Pabitro Mukherjee, deputy vice‑president of research at Bajaj Broking. He said the indices closed near their highs despite volatility around the Sensex expiry and after the U.S. Federal Reserve left its policy rate unchanged at 3.75%‑4%.

Currency Pressure

The rupee slipped to a two‑week low of 95.38 per dollar before closing marginally higher at 95.26. Traders linked the brief recovery to likely dollar sales by the Reserve Bank of India, while Anil Kumar Bhansali of Finrex Treasury Advisors said domestic dollar demand and possible overseas debt repayments outweighed any global easing effect.

Oil Headwinds

Brent crude hovered around $115 a barrel as the West Asia crisis pushed energy prices higher, raising concerns over India’s import bill, inflation and external balances. The higher oil price adds to dollar demand, further pressuring the rupee.

Context

The rebound follows an earlier surge that saw the Sensex jump 905 points and the Nifty cross 22,900 on strong buying in banking and FMCG stocks, highlighting the market’s sensitivity to global cues.