After witnessing volatile trading in the wake of US Fed meeting, Indian equities closed marginally higher. Recouping from six-year low, the Indian stock market benchmark Sensex added 170 points on Tuesday, while all eyes are looking towards the outcome of the US Federal Reserve's meeting.

It's estimated that Fed rate hike doesn't have much impact on India as it'll be outweighed by drop in oil price. Another major index Nifty rose 50.85 points. The S&P BSE Sensex was moving in a directionless during intraday trading and closed marginally up.

Foreign investors withdrew heavily from Indian markets ahead of Fed decision. The consumer prices rose in November and this is posing a challenge to the Reserve Bank of India (RBI).

Indian equities rose for the second consecutive session rebounding from six-year lows. S&P BSE Sensex was volatile after changing its direction for six times during intraday trading and closed marginally 0.7 percent or 170.09 points up. 

Live Mint noted that with traders pricing in 76 percent odds on the rate hike, the oil price drop will outweigh the impact of the Fed's decision on India, which is heavily dependent on imports. India meets its energy requirements up to 80 percent through oil imports. 

The consumer prices rose 5.4 percent in November from five percent rise in October. The consumer price rise is giving a tough task for RBI governor Raghuram Rajan.

The risk to RBI's target of five percent inflation rate target by March 2017 is increasing. Rajan forecast a quarter-point rate hike by US Fed this week.

Key Indian equities were trading on a cautious note in the early session. This was reflecting the mood ahead of Fed meeting. If US Fed hikes interest rate, then it'll make US investments attractive for foreign investors.

The Sensitive index (Sensex) of Bombay Stock Exchange (BSE) was trading in the narrow range bound, according to daijiworld.com.

The fund managers are bullish on Indian equities and hold positive views for 2016. The policy measures taken by Narendra Modi-led government have started showing results of late. Insurance, coal, gas, renewable, road, railways and power sectors are witnessing bottom-up progress, observe fund managers.

The market analysts opine that the US Fed rate hike is already discounted by Indian markets. In an interview with The Economic Times,

Samir Arora, the Singapore-based fund manager at Helios Capital, said: "We don't see much pain ahead. The expected Fed rate hike is well discounted and will make no material impact to markets. Indian markets already shrugged it off on Monday."

Foreign investors had pulled $489 million from Indian markets in the wake of possible US Fed rate hike forecast. The net buying of foreign investors was only $46 million on Tuesday after six sessions of outflows.

Adding to this, the increasing concerns about passage of unified sales tax bill in Indian Parliament also propelled sales pressure. 

Abhimanyu Sofat, Co-founder of a Mumbai-based investment advisory firm, said: "India is likely to decouple a bit from other emerging markets as the benefit of lower oil prices will overshadow concerns about the Fed's rate decision. European equities also opened strong aiding sentiment."

The opposition political parties are raising voice against the corruption charges against a leader of Congress Party. "Investors are tracking political developments as the Congress can't continue to drag its feet on GST for long," said Sofat.