Sensex jumps 500 pts, Nifty reclaims 23,000 post-Fed outcome; small, midcaps in red

Benchmark indices Nifty and Sensex opened strong on March 20, marking their fourth consecutive session of gains, after US Fed Chair Jerome Powell reaffirmed plans for two rate cuts in 2025. Rate-sensitive IT stocks led the rally, driving the indices higher.

Buoyed by development, Wall Street indices extended their initial gains to end the overnight session on a positive hold. The Dow Jones Industrial Average, S&P 500 and the tech-heavy Nasdaq gained 1-1.4 percent. Asia-Pacific markets also rose, taking cues from Wall Street’s gains after the Federal Reserve held interest rates steady and downplayed the risk of a severe economic downturn.

The Federal Reserve held interest rates steady at 4.25-4.50 percent, as widely expected, but flagged rising economic uncertainty, particularly around inflation risks linked to Trump’s proposed tariffs.

At about 10:25 am, the Sensex was up 467.63 points or 0.62 percent at 75,916.68, and the Nifty was up 147.15 points or 0.64 percent at 23,054.75. About 2096 shares advanced, 1203 shares declined, and 132 shares unchanged.

Midcap and smallcap stocks grabbed attention, but not for the right reasons, as the Midcap 100 and Smallcap 100 indices slipped 0.2 percent each after an early surge. While small-cap valuations have cooled, they remain far from cheap, prompting some market experts to anticipate stronger inflows into large caps first, followed by small caps, while midcaps may continue to face near-term pressure.

“In the Indian market, two key trends stand out. Domestic consumption themes are gaining traction, while export-driven IT stocks remain under pressure. At the same time, previously underperforming sectors like defence and shipping are seeing renewed interest, alongside strong momentum in consumer-focused digital stocks. This trend is likely to continue. However, the broader market may remain in a wait-and-watch mode until April 2, when reciprocal tariffs are announced,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

“The Fed holding the rates and projecting lower growth at 1.7 percent and higher inflation at 2.8 percent for 2025 are on expected lines. More significant is the Fed chief’s comment that policy can move either way depending on the evolving outlook. The evolving outlook is highly uncertain thanks to Trump’s tariff tantrums,” he added.

All 13 sectoral indices traded in the green, with Nifty IT leading the charge just a day after tumbling over 2 percent. Heavyweights TCS, Infosys, and Tech Mahindra drove the rebound. The PSU Bank index extended its strong run, rising 1.25 percent, while Nifty Realty, Oil & Gas, Bank, and Auto gained between 0.6 percent and 1 percent. Nifty Pharma and Metal edged higher, adding a modest 0.2 percent each.

Shares of cable manufacturers Polycab India and Havells slipped 5 percent each after Adani Enterprises, the flagship company of the Adani Group said that its wholly-owned subsidiary Kutch Copper Ltd. has incorporated a JV company called Praneetha Ecocables Ltd., in which, Kutch Copper will have a 50 percent stake. The JV will be engaged in the manufacturing, marketing, distribution, buying and selling of metal products, cables and wires.

Shares of Indian Renewable Energy Development Agency (IREDA) Ltd rose 2 percent on March 20 after the company launched its first issue of perpetual bonds. The state-run renewable energy financier aims to raise Rs 1,247 crore through the issuance, offering an annual coupon rate of 8.4 percent.

Nifty extended its gains on March 19, nearly touching the 23,000 mark during intraday trade as sentiment improved. The index ended near 22,900, with expectations of further upside. A decisive break above 23,000 could trigger a fresh breakout from the descending channel pattern, paving the way for higher targets of 23,800 and 24,200. Market breadth remained strong, with an advance-decline ratio of 5:1 at the close. For the day, Nifty’s support is seen at 22,800, while resistance stands at 23,200,” domestic Brokerage Prabhudas Lilladher said.

BankNifty maintained its strong momentum, decisively moving past the 50-EMA zone of 49,250 and closing near 49,700. With support from frontline banking stocks, the index is poised for further gains, targeting 50,900 (200-period MA) and 51,800 in the coming sessions. The daily range for BankNifty is expected to be between 49,300 and 50,500.

TCS, Titan Company, Bharti Airte, Eicher Motors and Bajaj Auto were the top gainers on the Nifty. Laggards on the index included Bajaj Finance, Bajaj Finserv, Trent, L&T, and Apollo Hospitals.