Sensex opens flat, Nifty holds 7650; Sun Pharma gains 1%

9:45 am Buzzing: Shares of Adani Enterprises gained 7 percent in early trade after the Australian court has dismissed Green Group's challenge to Adani Coalmine.

The rally in stock is on hope that USD 15 billion Carmichael coal mine may get clearance for mining. This project is stuck since 2010 for want of green nod.

Adani group recently requested the Australian government to draft a special law prohibiting Green Group's from seeking repeated judicial reviews of environmental approvals.

9:30 am FII view on Fed: A likely interest rate hike in the US, the first in nearly a decade, will be withstood well by equity markets in India, says Xavier Denis, Economist-Strategist at Société Générale Private Banking. In an interview with CNBC-TV18, Denis said a hike by the Fed, which starts its two-day rate-setting meeting today, will send a strong statement about the strength of the US economy, though he added that he would be wary of one market in the wake of a hike: the US high yield. "You have weakness in the commodity markets, especially oil, which could have a domino effect on energy companies [and their debt standing]," he said.

The market has opened flat. The Sensex is up 22.40 points or at 25172.75 and the Nifty is up 9.35 points at 7659.40. About 321 shares have advanced, 110 shares declined, and 34 shares are unchanged.

Sun Pharma, Hindalco, Tata Steel, Coal India and Maruti are top gainers while Cipla, ICICI Bank, ITC, HDFC Bank and Tata Motors are down in the Sensex.

The Indian rupee bounced back morning after hitting lowest closing level since September 3, 2013 in previous session. The currency has opened at 67.03 a dollar against 67.09 per dollar on Monday.

Ashutosh Raina, HDFC Bank feels the Fed rate hike is almost a certainty, but the market will be keenly watching the statement to get an idea about the pace of future hikes.

He says the USD-INR pair has been under pressure breaching the Rs 67/USD figure decisively, and is expected to trade weak ahead of FOMC meet.

Asian shares steadied in cautious early trade, as investors were reluctant to make any big moves amid volatile crude oil and before a widely anticipated US interest rate increase by the Federal Reserve later this week.

Markets were also focused on whether the People's Bank of China (PBOC) would continue to guide its currency lower, with traders wary about the central bank's intentions after it set the yuan/dollar official midpoint at 4-1/2-year lows in recent session.

Besides the direction of oil prices, the outlook for Fed monetary policy loomed large in the markets' collective consciousness. Investors have mostly priced in a rate hike this week, with the main question now hinging on how many increases will follow next year.