Sensex, Nifty Extend Gains for Third Day as Metal, PSU Bank Stocks Rally

Benchmark Indices Rise; IT and FMCG Stocks Under Pressure Ahead of Fed Meeting

Indian stock markets continued their winning streak for the third consecutive session on March 19, as a strong rally in PSU bank and metal stocks propelled key indices higher. However, gains were partially offset by declines in IT and FMCG stocks, as investors turned cautious ahead of the U.S. Federal Reserve’s FOMC meeting.

At 1 PM, the BSE Sensex surged 252.87 points or 0.34% to 75,554.13, while the NSE Nifty gained 100.15 points or 0.44% to 22,934.45. Market breadth remained positive, with 2,788 stocks advancing, 758 declining, and 103 remaining unchanged.

Market Drivers: Softer Dollar, Reduced FII Selling, and Strong Domestic Data

Several key factors are supporting the recent uptrend in the Indian stock market:

• Softer Dollar Index: The U.S. dollar index has eased from 110-111 to 103, reducing pressure on emerging markets.
• Decline in Foreign Institutional Investor (FII) Selling: FII selling has dropped by nearly 40-50%, indicating a shift in foreign investor sentiment.
• Better-than-Expected Inflation Data: India’s inflation figures have been lower than projected, boosting confidence in the economic outlook.

The Sensex and Nifty posted their biggest single-day gain in two months on March 18, with the Sensex surging over 1,200 points and the Nifty closing above 22,800. This sharp rebound was largely driven by massive short-covering by foreign investors, who turned net buyers after a prolonged period of selling.

Broader Market Performance: Midcaps and Smallcaps Outperform

The broader market continued to outperform the frontline indices, as the Nifty Midcap 100 soared 1.8% and the Nifty Smallcap 100 climbed 1.4%.

However, Aishvarya Dadheech, a market expert, cautioned that while small-cap stocks have reached more reasonable valuations, they are still not cheap. He expects large-cap stocks to attract stronger inflows, followed by small caps, while midcaps may face pressure in the near term.

Sectoral Performance: PSU Banks, Metals, and Infra Lead Gains

• Nifty Bank, PSU Bank, Auto, Metal, Oil & Gas, and Infrastructure indices gained between 0.8% and 1.7%, reflecting broad-based buying interest.
• The Nifty Pharma index edged up 0.3%, adding modest gains to the rally.
• Nifty IT and FMCG were the only major laggards, with the IT index tumbling over 1% ahead of the FOMC minutes.

Top Gainers: PSU Banks and Steel Stocks Shine

Among the top gainers in today’s session:

• Shriram Finance, Apollo Hospitals, Tata Steel, Adani Ports, and IndusInd Bank were the biggest winners on Nifty.
• Steel stocks surged up to 4% after the Directorate General of Trade Remedies (DGTR) recommended a provisional safeguard duty on Flat Steel Products, citing a sharp increase in imports that could impact domestic manufacturers.
• IndusInd Bank rose nearly 3% following the completion of Reliance Capital’s acquisition by IndusInd International Holdings (IIHL). IIHL Chairman Ashok Hinduja confirmed that the three-year-long resolution process had concluded successfully, fueling optimism in the stock.

IT Stocks Decline Amid Rate Uncertainty

The Nifty IT index fell sharply as investors braced for the Federal Reserve’s policy decision.

• LTIMindtree, TCS, Infosys, Coforge, and HCL Tech lost nearly 2%.
• Persistent Systems and Tech Mahindra declined over 1%.

Investors are closely watching Fed Chair Jerome Powell’s speech, as soft U.S. economic data and potential tariff policies from former President Donald Trump add uncertainty to the global market outlook.

Economic Events: Focus on Federal Reserve’s Policy Decision

Markets now shift focus to the Federal Reserve’s March FOMC meeting, scheduled for March 19-20.

• The Fed is widely expected to keep interest rates unchanged at 4.25–4.5%.
• Investors are awaiting the updated economic projections, which could provide insights into the Fed’s rate-cut timeline.

Market expert VK Vijayakumar of Geojit Financial Services noted that while the domestic macroeconomic environment remains positive, the sustainability of this rally depends on continued FII buying. He also cautioned about external risks, including Trump’s tariff plans, which could weigh on sentiment in the coming weeks.

Nifty Eyes 23,000 Resistance

Technical analysts are bullish on Nifty’s near-term prospects, with the index approaching a critical resistance level at 23,000.

• Angel One’s Sameet Chavan noted that the 23,000 mark aligns with the 50-day Exponential Moving Average (DEMA) and a dynamic trendline resistance.
• A breakout above 23,000 could push Nifty towards 23,400 (200-day Simple Moving Average – DSMA).
• On the downside, immediate support lies at 22,650–22,700, which was a previous resistance zone.

While the market trend remains positive, analysts advise caution ahead of the Fed meeting, as any unexpected announcement could trigger volatility in global markets.