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Worries of a drastic impact of the US Fed rate hike on Indian stock and currency markets turned out to be misplaced, when Sensex and Nifty opened higher on Thursday, in tandem with the rupee.

The S&P BSE Sensex opened with a gain of 135 points at 25,629.99, while the broader NSE Nifty was up 46 points at 7,797.65.

But they gave away the gains later during the day. At 1 pm, the Sensex was down 17 points at 25,477. 

The US Federal Reserve had increased the interest rate by 25 basis points on Wednesday, as was widely expected by analysts.

The rupee opened at 66.62 against the US dollar on Thursday, after closing at 66.74 on Wednesday.

Fitch Ratings said that the impact of the rate hike on India won't be much when compared to other emerging markets, given its strong macroeconomic indicators and India's strong growth forecast making it an attractive investment destination for foreign funds and companies.

"India...is better placed than many of its peers for a number of reasons. First, its external balances have significantly improved since mid-2013, with foreign exchange reserves rising by some USD65bn to USD353bn as of November 2015 and the current account deficit narrowing," said Thomas Rookmaaker, director, sovereign ratings, Fitch Ratings in a note.

He also added other factors that put India in a relatively safe position.

"India is less dependent than several of its peers on commodity exports, and has thus not been negatively affected by the global rout in commodity prices. Third, only a small part of India's sovereign debt is held by foreigners or is denominated in foreign currency. India's favourable economic growth outlook makes India relatively attractive for foreign investors."

Tata Steel, Hindalco, Sun Pharma and Hero Motocorp were the top Sensex gainers, while Maruti Suzuki, Axis Bank and M&M were trading with losses.

M&M said that the recent Supreme Court ban on sale of diesel vehicles in Delhi will impact 2% of its sales while inventory worth Rs 100 crore would also be in trouble.

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