Sensex, Nifty rise for 4th session on easing crude ahead of US Fed outcome; defence, bank stocks shine

Indian equity indices Sensex and Nifty extended gains into a fourth consecutive session, driven by tailwinds from moderating crude oil prices and positioning ahead of the imminent US Federal Reserve policy decision. The rally reflects renewed appetite for risk assets as energy cost pressures ease, reducing inflation concerns for emerging market economies dependent on energy imports.

Defence and PSU banking stocks emerged as primary outperformers, signaling investor rotation toward domestic-oriented and government-linked sectors. This rotation suggests confidence in government spending and structural demand, while consumer durables and metal stocks also participated, indicating broadening participation across cyclical segments. The mixed sectoral backdrop implies selective strength rather than broad-based conviction.

The anticipated Fed outcome looms as a critical catalyst, with market positioning reflecting uncertainty about interest rate trajectory. Easing crude prices provide a buffer against stagflation risks, supporting emerging market equities that typically underperform when commodity costs remain elevated and global monetary conditions tighten simultaneously.

Sector implication: The confluence of lower energy prices and defensive rotation into PSU financials suggests markets are hedging tail risks while maintaining selective exposure to domestic demand-driven plays. Investors appear to be building convex positioning ahead of US policy clarity, which could amplify volatility depending on Fed signaling.