Rajan also did his bit by taking steps to protect the currency against speculative attack as did the government in curbing gold imports and bringing the Current Account Deficit
These investors have pumped in about Rs 6,900 crore (Rs 69 billion) in the seven trading sessions after the Federal Open Market Commission meet.
"Indian markets (are) well placed to absorb the US Fed rate hike. Gradual approach in future increases augurs well for emerging markets," Economic Affairs Secretary Shaktikanta Das has tweeted.
An action on the rate front is unlikely to figure in Rajan's plan for the moment.
Gold retains gains, gain nearly 3 per cent in the past three sessions.
The Indian stock market had rallied through the first fortnight of October but it gave back the bulk of its gains in the second half.
Financials are the top gainers along with index heavyweights.
Top gainers of the session included Bajaj Auto, Kotak Bank, M&M, Vedanta, IndusInd Bank, Asian Paints, HDFC Bank, Reliance Industries, HUL, HDFC, ITC, Tata Steel and Tata Motors, rallying up to 5 per cent.
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Markets ended flat on Tuesday, amid a volatile trading session, as investors exercised caution ahead of the two-day FOMC meet starting today and Reserve Bank of India's monetary policy later this week.
Gold jumps on good seasonal support; silver extends losses.
Traders rejoice when the Fed drops the rate, but...
Markets could slide again owing to conditions in Europe and the US.
Kotak Bank was the top gainer in the Sensex pack, ending 4.31 per cent higher. PowerGrid, TCS, ICICI Bank, SBI, HCL Tech, NTPC, Infosys, Bajaj Finance, HDFC duo, ONGC, Vedanta and IndusInd Bank too rose up to 2.84 per cent.
Fed is still concerned about weak export growth.
The Indian rupee on Wednesday ended unchanged against the US dollar at 61.41 ahead of the outcome of US Federal Reserve's policy meeting.
The Sensex gained 130 points to close at 11,145.
The rupee on Tuesday lost another 15 paise against the US dollar to close at 65.88
Many analysts over the past week have said the RBI has legroom to cut rates to the tune of 65 bps by June and some like Barclays and BofA have also spoken about the likelihood of an inter-meeting cut.
Increased demand for the dollar from importers put pressure on the rupee.
64% of 800 investors polled think it will start this week but weak US data suggest it might not be aggressive.
The Nifty closed at 10,335.30, down 28.35 points, or 0.27 per cent.
The Bank Nifty is high beta anyhow and it could move the broader market.
The top gainers on the Sensex were Cipla, Bharti Airtel, Maruti Suzuki, Hero Moto & Sesa Sterlite.
The rupee rose by 4 paise at 66.88 against the US dollar in early trade on Wednesday.
The market breadth, indicating the overall health of the market, turned negative from positive
Also keenly watching inflation numbers, with wholesale inflation data expected today
A weak dollar sentiment across the board alongside unwinding of long positions by speculative traders ahead of key US macro data release largely supported the rupee
The S&P BSE Sensex ended the day at 28,226, up 85 points, while the Nifty50 settled at 8,734, up 18 points.
Nifty saw the biggest weekly gain since the first week of September and comfortably maintained its crucial 8250 levels in today's session
The breadth, indicating strength of the market was strong
In worldwide trade, the US dollar continued its highly bullish trend against all major emerging market currencies
Increased demand from oil importers for the American currency and a weak opening in the domestic stock market also put pressure on the rupee.
On the sectoral map, consumer durables stayed in the lead by surging 2.39 per cent, followed by realty index, oil and gas and infra.
The Fed's decision on tapering its monthly $85 billion bond-buying programme is expected later on Wednesday.
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Steps announced by new RBI Governor Raghuram Rajan could attract $10 billion of forex inflows in the next three months and this could be a material near-term positive for the rupee, which has lost 20 per cent since January, the London-based banking and financial services company said.
Heavy unwinding by foreign portfolio investors and lacklustre equities dampened the sentiment
The broader NSE Nifty too fell below the 10,100 level by dropping 100.10 points to end at 10,094.25
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