Nifty closes 0.43% higher as banks, FMCG offset IT weakness

Indian equities recovered after the previous session’s sell-off, but the advance remained selective. The move was attributed to buying in banks, consumer-facing companies and autos, while caution ahead of the US Federal Reserve’s policy decision and elevated oil prices limited the broader rebound.

Reliance Industries and State Bank of India were reported to have provided support, while Nestle India, ITC, Hindustan Unilever and Mahindra & Mahindra were among the stronger large-cap names during the session. Bank stocks outperformed the broader market, helping financials lead the recovery. These were market interpretations of the day’s positioning, rather than evidence of a single domestic catalyst.

FMCG and retail stocks led sectoral performance as investors favoured relatively defensive consumer businesses after the prior day’s sharp decline. The move also came as Brent crude eased during the session, although oil remained elevated and continued to pose a risk to India’s import bill and inflation outlook.

Metals and autos also recovered, with market participants linking the move to value buying after recent weakness. In autos, Mahindra & Mahindra was among the reported large-cap gainers. Power stocks were little changed, while telecom and internet names saw only limited gains.

Information technology was the clear laggard. Analysts attributed the weakness to profit-taking and the pressure on global technology valuations from high US Treasury yields and uncertainty over the Federal Reserve’s policy signal. The rupee’s weakness can support exporters’ reported revenue, but that factor did not prevent the sector from underperforming in this session.

The government’s new UPI merchant discount rate framework remained a key policy development. From October 15, a 0.4% MDR will apply to selected person-to-merchant UPI transactions above Rs 2,000, capped at Rs 300 for transactions of Rs 75,000 and above. The Financial Services Ministry said customers and person-to-person transactions would not be charged, while small-value merchant payments would remain outside the charge. The RBI backed the framework as a measure to support the long-term sustainability of the payments ecosystem.

For listed payment companies, banks and fintech platforms, the immediate issue is implementation and the eventual distribution of fee income and costs across the ecosystem. The framework could improve monetisation prospects for some participants, but the available material does not establish the earnings impact for any individual company.

The Cabinet Appointments Committee approved the continuation of Kamlesh Chandra Varshney as a SEBI whole-time member until August 2029 or until he reaches the specified age limit, whichever is earlier. SEBI also proposed tighter operational-resilience and disaster-recovery requirements for market infrastructure institutions, with public comments invited until October 5.

Overnight US equities declined as oil prices and bond yields rose, while Asian markets traded cautiously ahead of the Federal Reserve decision. The US 10-year Treasury yield had moved above 5% earlier in the week and was near 4.98% in Asian trading. Brent remained above $100 a barrel despite easing on September 16.

The combination matters for India through several channels: higher energy prices raise import-cost and inflation risks, elevated US yields reduce the relative appeal of emerging-market assets, and a firmer dollar puts pressure on the rupee. These were the global constraints on an otherwise constructive domestic session.

The latest available institutional-flow data, for September 15, showed foreign investors as net sellers of Rs 2,977.86 crore and domestic institutions as net buyers of Rs 2,686.05 crore. The figures predate the September 16 close and therefore should not be read as the final flow balance for today.

August retail inflation was reported at 4.82% year-on-year, up from 4.5% in July and within the RBI’s 2% to 6% tolerance band, although above the central bank’s 4% midpoint. Food inflation was reported at 5.95% year-on-year. The print keeps inflation relevant for the RBI, particularly as higher crude prices add a fresh external risk.

India’s August goods exports rose 26.13% year-on-year to $43.81 billion, while imports increased 14.1% to $70.67 billion. The goods trade deficit narrowed to $26.86 billion from $27.2 billion a year earlier. The export strength offers support to the external account, but the higher import bill remains important for the rupee and domestic costs if energy prices stay high.

Corporate news was led by order wins and strategic agreements rather than a major earnings surprise in the available material. Saatvik Green Energy received a Rs 1,041.63 crore solar-module order from SECI, with completion expected by December 2027. The order gave the stock a company-specific catalyst against a cautious broader market.

BHEL and Titagarh Rail Systems agreed to form a 50:50 joint venture for the 35-year comprehensive maintenance of Vande Bharat sleeper trainsets. Sonata Information Technology signed a five-year strategic collaboration agreement with Amazon Web Services to pursue cloud adoption and modernisation opportunities in India.

Blue Dart Express said Managing Director Balfour Manuel would retire early, with DHL Express India’s R.S. Subramanian appointed as successor. The available material did not provide a comparable earnings result, company guidance change or consensus estimate for the session.

The market’s next focus is the Federal Reserve’s policy decision and its guidance on future rates. For Indian equities, the reaction in US yields, the dollar and crude may matter as much as the policy rate itself. Domestically, traders will also assess whether foreign selling persists and whether banks and consumer stocks can sustain the rebound after the prior session’s decline.