BENGALURU: Indian shares rose more than 1% on Wednesday, with banking and automobile stocks helping the markets rebound, as investors closely watched the US Federal Reserve for projections on its path of rate hikes this year.

As of 0521 GMT, the blue-chip NSE Nifty 50 index was up 1.40% at 16,896.85, while the benchmark S&P BSE Sensex climbed 1.46% to 56,590.64.The Fed’s two-day meeting will end later in the day, where the US central bank is widely expected to raise its benchmark overnight interest rate by a quarter of a percentage point.

Domestic investors will keep a close watch on Fed’s stance and take cues on what it would mean for emerging economies.

A combination of overvaluation fears, consistent selling by foreign investors, a miss on economic growth estimates and the Russia-Ukraine conflict have pushed the Nifty and Sensex down 2.8% each so far this year.

“Small negatives can trigger large moves on either side (and) that is what we are seeing (in the markets). The daily intraday range is at a heightened level,” said Deepak Jasani, head of retail research at HDFC Securities.

Aiding sentiment, broader Asian markets gained, with investors’ eyes on volatile oil prices, Ukraine-Russia peace talks and the US Fed meeting.

In Mumbai trading, all the major sub-indexes gained, with the Nifty Bank Index and the Nifty Auto Index adding 1.86% and 1.69%, respectively.

The Nifty energy index and the Nifty Metal Index jumped 1.20% and 2.20%, respectively, tracking the surge in commodity prices.

Food delivery firm Zomato gained as much as 4.5%, a day after a media report said it had reached a merger agreement with instant-delivery startup Blinkit.