Value buying ends Nifty's five-session slide; IT cools, FMCG leads, and the Fed lands tonight

The opening. Nifty opened with an 83-point gap up at 23,202, ahead of the key FOMC meeting, as global equities consolidated while crude oil prices remained firm above $107 per barrel. The index saw sharp volatility immediately after the open, briefly rising towards 23,250 before reversing and plunging to an intraday low near 23,120 within the first half hour.

The morning recovery. However, the fall was quickly bought into, with Nifty recovering above 23,200 by around 10 AM and extending the rebound towards 23,260–23,270 by 11 AM. It then gave up some gains and moved back towards 23,220–23,230 by the end of the first half.

The second half. The second half remained equally choppy. Nifty initially climbed back towards 23,260, before another sharp move around 1 PM briefly took the index to the day's high near 23,280. The gains again proved difficult to sustain, with Nifty falling towards 23,215 before recovering.

The close. The final couple of hours were relatively calmer, with the index largely consolidating in the 23,220–23,245 range as traders remained cautious ahead of the Fed decision. Nifty eventually closed at 23,217.60, around 16 points above its opening level, after a highly volatile but largely directionless session.

• Positioning — OI ladder for the Sep 22 expiry: Maximum Call open interest sits at 23,500, followed by 23,400 — flagging resistance at the 23,400–23,500 band. Maximum Put open interest is at 23,000, followed by 23,200, suggesting support at 23,000–22,900.

• How to read it: OI is subject to multiple interpretations; generally, an increase in Call OI indicates resistance in a falling market, while an increase in Put OI indicates support in a rising market (Sensibull note, via the AMR).

• The technical upshot: The market spent Sep 16 oscillating through the middle of that 23,000–23,500 corridor without conquering either edge — a classic pre-event compression, with the entire band intact into the Fed.

• The selling moderated: FIIs net-sold ₹2,032.61 crore on Sep 16, down from ₹2,977.86 crore on Monday. Gross FII turnover was still heavy at ₹14,991.65 crore of sales against ₹12,959.04 crore of buys — the exit is slowing, not finished.

• The domestic bid answered again: DIIs bought ₹3,908.23 crore net, up from ₹2,686.05 crore on Monday and the largest daily absorption this week. That single line explains why a session with a 160-point intraday range and weak breadth still closed green.

• What it means: With the Fed landing and the rupee near record lows, the marginal buyer of Indian equities remains domestic. Watch the FII print more than the index level: a turn in flows is the signal that the September drawdown is actually over.

• UPI just got cheaper for market intermediaries: The government's new UPI MDR framework sets a 0.02% fee, capped at ₹300 per transaction, for payments related to mutual funds, securities, stockbrokers and dealers — against the standard 0.4% MDR on person-to-merchant UPI transactions above ₹2,000. For distributors and brokers, that is a structural cost line; for the UPI rails, it is a new revenue pool.

• EPF coverage widens for the first time in over a decade: The Union Cabinet raised the monthly wage ceiling for mandatory EPF coverage from ₹15,000 to ₹25,000 — expected to bring more than 51 lakh additional employees under mandatory EPFO coverage, expanding retirement and social-security reach.

• The RBI drained ₹2.90 lakh crore in a day: Two VRRR auctions absorbed ₹2.50 lakh crore and ₹40,302 crore respectively, both at 5.24%, as the central bank continued operations to manage a large banking-system liquidity surplus. This is the same impulse that pushed the 10-year yield through 7% last week.

• Meta is building its own inference silicon: Meta Platforms plans to roll out next-generation Arke and Astrid AI inference chips in 2027 — Arke around mid-year, Astrid towards the end — to cut its dependence on Nvidia hardware and lower the cost and energy of running AI workloads in its data centres.

• Currency: USD/INR reference cross at 96.02 (exchangerate-api.com, updated Sep 17, 00:02 UTC) — the rupee remains the single clearest transmission channel of the oil and rate shock into Indian asset prices.

• Rates and liquidity: The RBI absorbed ₹2.90 lakh crore of surplus banking-system liquidity through two VRRR auctions at 5.24%. Tightening the liquidity surplus is the quiet hawkish signal; Indian 10-year yields crossed 7% last week and have stayed there.

• The Fed lands tonight: The Federal Reserve is expected to raise rates 25 bps to 3.75–4.00% — its first hike since 2023 — as inflation stays above the 2% target with elevated oil and energy prices following the Iran war adding to price pressures and complicating the outlook.

• UK inflation back at a five-month high: UK CPI accelerated to 3.1% year-on-year in August from 2.9% in July. Transport inflation jumped to 4.6% from 3.6%, driven mainly by motor-fuel prices — pressure that will shape the Bank of England's decision today.

• Oil eased, diesel did not: Brent fell 0.5% to $108.16 a barrel and WTI slipped to $104.63 after reports that Saudi Arabia was offering additional crude cargoes through Oman, easing some Middle East supply concerns. But European diesel prices stayed near record highs, highlighting continued tightness in fuel markets despite the pullback in crude.

• The tariff escalation path widened: The U.S. House advanced a bill giving President Trump authority to impose tariffs of up to 100% on goods from India, China and other major buyers of Russian oil and gas, while also expanding sanctions on Russia and Iran. For Indian exporters and the rupee, this is now a live tail risk rather than a talking point.

• Chinese money is leaving China: Beijing raised the QDII outbound investment quota by $6.8 billion to a record $183 billion, and investors rushed into overseas assets — mainly U.S. equity funds. A Nasdaq 100-tracking fund lifted its daily investment limit from 10 yuan to 5,000 yuan on September 9, only to cut it back to 100 yuan the next day, showing pent-up demand for foreign assets against rock-bottom domestic yields.

“Tax policy should not add to those challenges or become a deterrent to investment, enterprise, and innovation. It must provide the revenues required for our development while remaining fair, predictable, administrable, and supportive of economic activity.”

“Even a 0.4% MDR — which, by the way, is still the lowest of all MDR regimes in the world — even this number at India's population base should hopefully generate meaningful revenue, which will help offset a lot of our expenses.”