Closing Bell: Market snaps two-day losing streak ahead of Fed minutes; Nifty above 16,600, Sensex jumps over 500 points

Snapping a two-day losing streak, the Indian market closed strongly ahead of US Federal Reserve meeting outcome on late Wednesday. Benchmarks Nifty50 and Sensex ended almost one per cent higher.  

"Following a start with a weak note, the Nifty recovered smartly as the day approached. On the lower end, it found support around 16400 whereas, on the higher end, it moved above 16600. The trend looks positive at the current juncture. On the higher end, the recovery may continue towards 16750-16800. Support on the lower end is placed at 16400-16350," said Rupak De, Senior Technical Analyst at LKP Securities. 

The broader Nifty50 closed above 16,600, while the Sensex jumped around 550 points to close near 55,800.  

Following benchmarks Nifty Midcap rose over one per cent, however, Smallcap witnessed some profit booking as the index ended flat on Wednesday.  

Meanwhile, all sectoral indices sat in the green with Nifty IT, Pharma and Healthcare leading the pack. Sun Pharma gained the most on Nifty50 and 30-share Sensex, while Sate Bank of India, Divis Laboratories, Asian Paints, L&T, TCS, Ultratech Cements, Bajaj Finance, IndusInd Bank and Axis Bank were other leading gainers on the benchmarks.  

Bharti Airtel, Kotak Bank, Bajaj Auto, HDFC Life and Reliance Industries were among those which declined in an otherwise positive market.  

Meanwhile, the Fed is expected to raise interest rate by 75 basis points today.  

"The Fed announcement on interest rates expected late tonight is unlikely to impact equity markets in a big way since the most likely outcome of 75 bp rate hike has been discounted by the markets," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. 

The market, which continues to be volatile, is swinging between fears of an imminent US recession on one side and hopes of the US avoiding a sharp economic slowdown on the other said Vijayakumar. "Only time will tell which of the two scenarios will play out," he added.