Sensex, Nifty 50 muted, rupee reclaims 96 after US Fed rate hike, NSE IPO in focus

Compounding the cautious tone against the backdrop of the US Fed rate hike was a flurry of primary market activity, headlined by the opening of the NSE IPO.

India's benchmark indices opened flat with a negative bias on Thursday, as an interest rate hike by the US Federal Reserve and stubbornly high global crude oil prices weighed on investor sentiment. At the same time, all eyes are on the highly anticipated NSE IPO.

At 9:15 am, the 30-share S&P BSE Sensex fell 0.21% to 74,182.62 points, even as the wider NSE Nifty 50 shed 0.1% to 23,195.25. The indices were little changed as of 9:45 am. Eight out of the 16 major sectoral indices logged losses at the open, while the broader mid-cap and small-cap gauges traded flat. The Nifty IT index fell 0.5% as highes US borrowing costs threaten to dampen software spending and demand in their primary geographic market.

The cautious domestic sentiment mirrors global cues following a unanimous overnight decision by the US Federal Reserve to raise interest rates by 25 basis points (bps)—its first increase in more than three years. One basis point is one-hundredth of a percentage point. Furthermore, updated quarterly projections indicated that 16 of 18 Fed policymakers expect at least one additional 25 bps hike by the year-end.

Compounding the cautious tone was a flurry of primary market activity, headlined by the opening of the NSE IPO. The mammoth offering is expected to lock up significant retail and institutional capital, sidelining funds from the secondary cash market. Moreover, foreign institutional investors (FIIs) remain net sellers, offloading ₹2,032.61 crore worth of equities on Wednesday.

The Indian rupee weakened past the 96/Dollar mark for the first time since 27 July 2026, as against Wednesday's close of 95.96. The currency had already plunged by 113 paise, or more than 1%, over the preceding five sessions from 94.43 on 4 September.

Anuj Choudhary, research analyst at Mirae Asset Sharekhan, noted that elevated oil prices, rising US Treasury yields, and consistent foreign fund outflows heavily pressured the rupee ahead of the Federal Open Market Committee (FOMC) decision, though gains in domestic equities prevented a steeper slide.

The dollar index, which tracks the greenback against a basket of six major peers, traded 0.04% higher at 99.38. Choudhary expects the USD-INR spot pair to trade in a ₹95.75 to ₹96.20 range.

Brent crude futures eased slightly to approximately $106 a barrel after reports indicated that Saudi Arabia offered additional spot cargo via Oman, mitigating some supply anxieties. However, the global benchmark remained elevated near $107.51 per barrel in broader futures trade.

Escalating geopolitical tensions, including Iranian-backed Houthi rebel attacks on Saudi shipping and infrastructure, along with persistent restrictions around the Strait of Hormuz, continue to stoke fears of Red Sea supply disruptions.

(with agency inputs)

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