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Indian shares are likely to open higher on Wednesday, having slipped to a five-week low in the previous session, tracking Asian peers ahead of the U.S. Federal Reserve's rate decision and commentary.

The GIFT Nifty was trading at 21,934 as of 08:12 a.m. IST, indicating the Nifty 50 will open above Tuesday's close of 21,817.45.

Both the Nifty 50 and BSE Sensex lost about 1% on Tuesday, with the information technology index dropping about 3%, leading the losses.

The broader, more domestically focussed small- and mid-caps extended declines as a correction continued in the segments on concerns over elevated valuations.

They are down 8.7% and 5%, respectively, in March, compared with a 0.75% drop in the Nifty 50.

"The correction in the domestic market has been triggered by concerns over premium valuations and fears of rate cut delays by the Fed due to hotter-than-expected inflation data," said Vinod Nair, head of research at Geojit Financial Services.

Asian markets opened higher, with the MSCI Asia ex-Japan index adding 0.35%. Wall Street equities closed higher overnight. [MKTS/GLOB]

The Fed is expected to keep rates unchanged when it meets after the closing bell on Wednesday. The focus will be on the commentary, as investors look for clues into the future rate trajectory in the United States.

Markets have pushed back the timing of the first Fed rate cut to June due to sticky inflation data.

Foreign portfolio investors bought Indian shares worth 14.21 billion rupees (~ $171 million) on a net basis on Tuesday. Domestic institutional investors added a net 74.50 billion rupees of stocks.

STOCKS TO WATCH

** Ultratech Cement: Government says competition watchdog approved acquisition of Kesoram Cement business from Kesoram Industries by Ultratech. ** Aurobindo Pharma: Company receives U.S. drug regulator's approval for mometasone Furoate monohydrate nasal spray, used to treat nasal allergies.

** Inox Green Energy: Company's unit secures an order from NLC India for restoration of 33 wind turbine generators.

($1 = 83.0050 Indian rupees)