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MUMBAI  - The Indian rupee firmed on Wednesday, tracking gains in emerging market assets on the back of weak global crude oil prices, even as caution prevailed ahead of the U.S. Federal Reserve's policy decision due later in the day.

Most emerging Asian stock markets advanced, buoyed by a fall in China's COVID-19 cases and hopes of progress in Russian-Ukraine peace talks.

The partially convertible rupee was trading at 76.25/26 per dollar, stronger than its previous close of 76.61.

"The tone of the policy statement and Fed Chair (Jerome) Powell's speech will be closely followed," said Abhishek Goenka, chief executive officer at consultancy firm IFA Global.

"How the Fed assesses risks to growth will be important, given the uncertainty around the Ukraine-Russia situation. If the Fed highlights risks to growth, we may see the market reduce expectations of hikes. U.S. yields would drop and the dollar would weaken."

Investors expect the U.S. central bank will need to act more aggressively to stem surging prices, after data released last Thursday showed that annual inflation in February rose at the fastest pace in 40 years.

India's broader NSE share index and the main BSE share index both were trading up 1.4%.

Global crude oil prices have declined in recent weeks, aiding sentiment for the rupee which had been weighed down by worries that India's import bill would shoot up and trade and current account deficits would widen.

Oil prices rose as much as $3 on Wednesday, bouncing back after earlier declines, as Russia's invasion of Ukraine continued to stoke volatile trading with ceasefire talks the latest market trigger. [O/R]

India's benchmark 10-year bond was trading at 6.81%, down 1 basis point on the day.