Sensex Opens Higher, All Eyes On Key US Fed Decision Today

Global markets staged a rally for the second straight day on hopes the US Fed would go slow with interest rate hikes, as the global banking crisis evolves. The US Fed decision later today, remains crucial for the currency, stock and commodity markets across the globe.

Investors and analysts have baked in a 25 basis points hike. However, a status-quo on interest rates could lead to a further rally in stocks across the globe.

"We advise investors to remain cautious, as markets are likely to remain volatile ahead of Fed's meeting outcome on Wednesday late evening. US Fed's commentary amidst the ongoing financial crisis would be of key importance and can provide some direction to the markets," says Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

The Sensex was trading higher by 245 points, while the Nifty gained 68 points on Wednesday in early trade. On Tuesday, domestic equities witnessed a smart recovery after falling in the last few sessions. Positive global cues, value buying at lower levels and some amount of short covering helped the indices close in green. Nifty opened positive and saw sustained buying throughout the day to close with gains of 119 points (0.7%) at 17107 levels. Strong action was seen in banking sector with Bank Nifty up sharply by 1.4%. Oil & Gas and Consumer Durables were other major gainers for the day up more than 1% each.