Equity benchmarks ended at two-week closing high on Thursday, tracking rally in global peers after the first Fed rate hike in almost a decade. Index heavyweights drove the market higher. The broader markets outperformed benchmarks, rising more than 1.5 percent.
The market rallied for fourth consecutive session today. It was a U-shape recovery for benchmark indices as the market slipped in red after rallied for first half an hour of trade but it managed to rebound significantly in last couple of hours of trade.
The 30-share BSE Sensex surged 309.41 points or 1.21 percent to 25803.78 and the 50-share NSE Nifty rose 93.45 points or 1.21 percent to 7844.35. The market breadth was strong as nearly three shares advanced for every share declining on the Bombay Stock Exchange.
Analysts feel that after Fed rate hike, the next trigger may be oil price that has been hitting multi-year lows amid supply glut concerns.
“Markets tend to switch around their focus fairly quickly. I think the attention will switch to the weakness in oil,” says Guy Stear of Societe Generale, adding that the crude slump will manifest itself in different ways for different countries and markets.
Vibhav Kapoor expects next Fed rate hike in March.
Finally Federal Reserve raised interest rates by 25 basis points, which was the first rate hike since 2006. In Europe, Germany’s DAX surged 3 percent followed by France’s CAC (up 2.6 percent) and Britain’s FTSE (up 1.5 percent). Asian markets also closed higher with the Nikkei and Shanghai up more than 1.5 percent.
Crude oil prices extended fall with the Brent crude down 0.5 percent to USD 37.18 a barrel and NYMEX crude down 1.13 percent to USD 35.12 a barrel amid surprise build in US inventories.
Back home, the rupee also gained further on Fed rate hike, up 26 paise to 66.47 a barrel.