Here are top 10 developments:
1) Analysts say Indian markets are likely to turn volatile in late trade as traders lighten positions ahead of the US Federal Reserve rate decision. The two-day meet of the US central banks begins today. Indian markets will be closed on Thursday for a holiday.
2) Market analyst Rajat Bose says Nifty may cross 8,050 if the Fed does not hike rates. On the other hand, a rate hike in US or hawkish comments from the Fed could send the Nifty down to 7,800-7,750, he added.
3) Although the Fed has signalled its plans to lift interest rates in 2015 - which would be its first hike in nearly a decade - some analysts say turbulence in the global financial markets could prompt the US central bank to delay the rate hike. Worries over the growth of China's economy have added uncertainty to global financial markets.
4) An interest rate hike in the US could accelerate the selling from foreign investors in Indian markets. Besides, a rate hike in the US would strengthen the dollar, putting further pressure on rupee.
5) The rupee pulled back to 66.35/dollar after falling to 66.51 at day's low. On Tuesday, rupee had closed at 66.36/dollar.
6) Foreign investors sold a record Rs 16,877 crore (net) worth of domestic stocks in August, leading to the recent selloff in Indian markets. On top of that, they sold nearly Rs 7,000 crore so far this month.
7) Analysts say after the Fed rate decision, the next trigger for markets would be the Reserve Bank of India policy review on September 29. Most analysts say that if the Fed rate decision does not trigger a turmoil in global markets, particularly in the rupee, the RBI may cut rates by at least 25 bps. RBI chief Raghuram Rajan had earlier indicated the central bank may take a mid-policy rate action if needed.
8) Banking stocks led the gains with Axis Bank, Yes Bank and IndusInd Bank rising 2-3 per cent. Export-oriented IT and pharma stocks also rose after overnight data in the US showed healthy growth in consumer spending. Wipro and Sun Pharma were up 1-2 per cent. Sun Pharma shares also got a boost on acquisition of a US-based phthalmic products drugmaker.
9) Asian shares followed Wall Street higher on Wednesday, albeit in thin volume, and short-term U.S. bond yields held near 4 1/2-year highs as investors braced for the possibility of the first interest rate hike in the United States in almost a decade.
10) China shares rose nearly 5 per cent after sliding 6 per cent early in the week while Japan's Nikkei edged up 0.80 per cent. European markets also traded firm in early trade. Overnight, US shares rose 1 per cent overnight, in part helped by data showing healthy growth in consumer spending.
