The News International Team
Short covering-led buying interest in stocks post Fed meet outcome helped the Sensex snap five-day losing streak on Thursday. Not only equity but also the currency and crude oil prices rebounded from their multi-month lows.
The 30-share BSE Sensex reclaimed 27000-mark, up 416.44 points or 1.56 percent to close at 27126.57. The 50-share NSE Nifty ended the session above 8150, up 129.50 points or 1.61 percent at 8159.30.
The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 2.66 percent and 3.3 percent, respectively. Advancing shares outnumbered declining ones by a ratio of 2171 to 693 on the Bombay Stock Exchange.
Despite the recent sharp fall in equity markets, experts remain bullish on India. According to them, deferral of rate hike by Federal Reserve sparked global rally today.
Adrian Mowat of JPMorgan says he is not worried about a little bit of volatility in emerging markets while Nirmal Jain of IIFL too is betting on India, saying 2015 can emerge as a good year for the market.
Sentiment today was also boosted by the Cabinet passing the Constitutional Amendment Bill on Goods and Services Tax on Wednesday.
Meanwhile, the Federal Open Market Committee (in its policy statement on Wednesday midnight) indicated that it is likely to initiate interest rate lift-off in mid-2015. The highlight of the policy was that the FOMC dropped its “considerable time” assurance. It has been replaced with forward guidance that states the Fed will be “patient in beginning to normalize the stance of monetary policy.”
Fed Chairperson Janet Yellen says “patient” means at least for the next two meetings.
European markets like CAC, DAX and FTSE gained 0.8-2 percent (at 16 hours IST) while most Asian markets closed lower with the Hang Seng and Nikkei rising 1-2 percent.
Commodities extended rally with the Brent crude oil prices climbing above USD 62 a barrel, up 2.24 percent to 62.55 while US crude rose 2.11 percent to USD 57.66 a barrel.
On the home turf, the rupee also bounced back from its 13-month lows, up 45 paise to 63.16 a dollar while the benchmark bond yields too softened to 7.91% levels.
All sectoral indices closed in green. Auto, Bank, Capital Goods, Metal, Power and Realty indices rallied 2-3 percent.
Power equipment maker BHEL was the top gainer on Sensex, up nearly 5 percent followed by ICICI Bank, Maruti Suzuki, NTPC and Hindalco Industries with 4 percent gains.
Gail India surged 4 percent as Supreme Court allowed the state-run gas transmission company to participate in Ennore-Tuticorin tender. Earlier, GSPCL had alleged Gail disallowing open access to Dabhol pipeline and PNGRB had disallowed company from participating in Ennore-Tuticorin tender.
Engineering and construction major Larsen and Toubro was up 2.4 percent as Canada Pension Plan Investment Board, through a subsidiary, made an initial investment of Rs 1,000 crore in L&T Infrastructure Development Projects (a subsidiary of L&T) on December 16 by way of subscription to compulsorily convertible preference shares.
Infosys, HDFC Bank, Tata Motors, Axis Bank, Reliance Industries, SBI, Cipla and Bharti Airtel rallied 1-3 percent while Mahindra & Mahindra and Dr Reddy’s Labs were the only losers with marginal loss.
Punjab National Bank gained 4 percent and JK Tyre surged 18 percent after sub-division of face value of shares from Rs 10 to Rs 2.
In the broader space, SpiceJet was up 0.4 percent on resumption of normal operations. Sources told CNBC-TV18 that the government is planning financial relief for the sector and also considering a proposal to regulate airfare.
Intellect Design Arena, the demerged BFSI focused product company from Polaris, listed on the stock exchanges today. The stock ended 5 percent higher at Rs 72.70 after listing at Rs 69.25 per share.
Mastek, DCB Bank, Torrent Power, HDIL, Arvind Remedies, Redington, PFC, Arvind, Ashok Leyland, HCC, Sintex, Motherson Sumi, Canara Bank, Liberty Shoes and IVRCL jumped 7-20 percent.