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Informist, Wednesday, Sept. 16, 2026

By Adhithya Aji

MUMBAI – Benchmark indices are expected to have a subdued open Wednesday as investors are likely to take a cautious stance ahead of the US Federal Reserve's monetary policy decision later in the day. Markets expect the Fed to raise its benchmark interest rate amid higher crude oil prices, rising bond yields, and the ongoing war in West Asia. A rate hike will likely trigger a sharp correction in equities globally, according to analysts.

Moreover, another tariff threat from the US is looming over India. The US House of Representatives has moved on with a bill that could allow tariffs of up to 100% to be imposed on India. The "Lindsey O. Graham Sanctioning Russia And Iran Act Of 2026" bill, if passed, will allow US President Donald Trump to impose tariffs on India and nine other countries for their crude oil trade with Russia, according to media reports. The final vote on the bill will take place Thursday. 

The November futures of Brent crude were over $108 per barrel and US Treasury yields hovered near their highest level since 2007 ahead of the Fed's monetary policy decision. The 10-year US bond yield rose 5 basis points to 5% Tuesday. If the Fed raises interest rates, the Reserve Bank of India is expected to raise its rates as well, according to the head of research at a domestic brokerage. "So there is a global risk which will definitely hurt our market as well. The domestic markets definitely will fall, but the intensity will be lower as compared to the global markets," the analyst said. Currently, 92% of market participants expect the Fed to raise interest rates to 3.75-4.00%, as per the CME FedWatch tool. 

The RBI is expected to raise its repo rate from 5.25% currently as inflation is seen to move higher, Systematix Institutional Equities said in a report. "WPI (wholesale price index) persistently high, CPI nearing 5% and a projected climb towards 6% all point to growing discomfort with negative real rates scenario," the brokerage said. Inflation is expected to sustain its rise, potentially crossing 6% by October and November. El Nino effects on food supply and elevated crude oil prices point to further upside risk for India, according to Systematix.      

At 0746 IST, the September futures of GIFT Nifty were at 23222, up 0.1%. The GIFT Nifty trend indicated a subdued opening for the Nifty 50. "Prolonged elevated crude oil prices are a major negative for the Indian economy, as they will directly impact inflation and the currency," Vipin Kumar, senior technical and derivatives analyst at Globe Capital Market, said. A sustained trading below 23000 levels could drag the Nifty 50 further down toward 22500, and to lower levels in the immediate near term, according to Kumar.

On the global front, Asian markets opened mixed Wednesday. Japan's benchmark Nikkei 225 was down 0.2% and South Korea's Kospi rose 0.2%. Wall Street indices closed lower Tuesday.  End

US$1 = INR 95.95

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Shubhayan Bhattacharya

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