Indian shares muted as Fed, oil and IPO rush dent risk appetite

Indian shares were little changed on Thursday as a U.S. rate hike and hawkish Federal Reserve commentary, elevated oil prices and a crowded IPO market offset bargain buying that followed the recent selloff.

The $2.3 billion IPO for India’s biggest bourse, National Stock Exchange — also set to ‌be the country’s third-largest ever — opened for bidding on the day, with investors subscribing about 36% of the portion on offer by 3:30 p.m. IST.

The Nifty 50 rose 0.23% to 23,270.6, while the BSE Sensex shed 0.03% to 74,314.59. They had risen as much as 0.6% and 0.5% in intraday trade.

Ahead of the closing auction, which marked BSE’s weekly derivatives expiry, the Nifty was up 0.3% and the Sensex rose 0.10%. Most market participants said the regulator’s weekend proposals to overhaul derivatives settlement could help curb expiry-day volatility.

Twelve of the 16 major sectoral indexes gained. The broader small-cap and mid-cap indexes rose 0.8% and 0.9%, respectively.

Auto index gained 1%, taking its two-session advance to 1.5%. The sub-index fell about 4% over the preceding four sessions.

Nifty rose for two sessions after falling about 6% over the previous five weeks. Traders attributed the uptick to short-covering from oversold levels in select pockets, while reiterating cautious market sentiment due to elevated crude prices and tightening global monetary conditions after Fed rate hike.

“Another (Fed) hike remains possible in December 2026, depending on the evolving macro landscape, especially crude prices,” said Ankita Pathak, head of global investments at Ionic Asset. “India may have to consider a hike at its next policy meeting after the Fed decision.”

Most major Tata group companies rose, with Tata Motors PV, Tata Motors, Tata Steel and Tata Investment gaining between 2.3% and 5.5%.

The board of Tata Sons approved a fresh five-year term for N Chandrasekaran as executive chairman, Reuters reported, citing a source familiar with the matter. The Economic Times first reported on the board’s decision.