The Indian equity market continues to maintain upward momentum on Wednesday after closing on a positive note in yesterday's trading session. BSE Sensex opened at 62,685 points and currently trading between the range of 62,700 to 62,800 points, whereas NSE Nifty-50 opened at 18,671 points and currently trading well above the 18,500-mark.

The Nifty Bank index, which indicates the performance of the domestic banking sector, hits a fresh record high for the second consecutive session, surpassing the 44,000-mark on the back of strong credit growth in the economy.

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Sensex stocks.Reuters

"Markets are likely to be in a strong position in early trades Wednesday, as uptick in the US and Asian indices would help the mood stay bullish. All eyes will be on today's US FOMC meeting on interest rate later in the day, as the outcome would set the tone for the rest of the equity markets across the globe. If the rate hike is on expected lines, the likely optimism could continue in the next few sessions, although other concerning factors like recessionary fears and slowdown in global growth could test markets in the long term," said Prashanth Tapse – Research Analyst and Senior VP (Research) at Mehta Equities.

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The US stock market also ended in green after the lower-than-expected inflation data. The Dow Jones Industrial Average added 104 points, or 0.3%, while the S&P 500 gained 0.7% and the Nasdaq Composite gained 1%.

The much-awaited US inflation data gave the financial market optimism ahead of the Fed's rate hike announcement. November's headline CPI rate cooled off to 7.1 % from 7.7% in the prior month, marking the lowest level since the end of 2021, after peaking at 9.1% in June. The street expects a 50-bps rate hike tomorrow and a much smaller incremental rate hike in the upcoming policy meeting as inflation shows signs of cooling off.

"The report was a game-changer because this is the first time people are talking about the idea that we could really see inflation come down to 3% next year, and what we are seeing is a major adjustment in people's Fed-rate-hike expectations," said Edward Moya, a senior market analyst at Oanda.