Sensex surges by 416 points as a ‘dovish’ Fed boosts global markets

19/12/2014

Mumbai: Snapping five days of losses, the BSE benchmark Sensex on Thursday recorded its biggest one-and-a-half month gain of 416 points to reclaim 27,000-mark after US Fed said a rate hike was unlikely in the short-term boosting global markets.
Value buying in the wake of steep losses in the previous five days and heightened hopes of long-pending tax reforms finally rolling out also helped the stock indices to surge.
The Cabinet yesterday had cleared the Constitutional Amendment Bill on GST, clearing the way for its introduction in the ongoing session of Parliament.
Stability in Russian currency was also a boost to global markets which in turn helped local bourses, traders said.
The 30-share BSE index resumed with an upwide gap of over 340 points and remained in the positive terrain through the day.
It finally concluded at 27,126.57, showing a rise of 416.44 points 1.56 percent.
In the previous five sessions, the barometer had lost 1,120.97 points or 4.03 percent.
Across-the-board buying saw all 12 sectoral indices closing higher in the range of by 1.09-5.26 percent, with consumer durable, power, capital goods, realty, bankex, auto and metal taking the lead.
Of 30 Sensex stocks, 27 finished with gains while three others were losers. BHEL at 4.91 percent was the biggest Sensex gainer, followed by Hindalco 4.31 at percent, Gail India 4.19 percent, Maruti Suzuki 3.91 percent, NTPC 3.83 percent, ICICI Bank 3.82 percent.
"Indian markets bounced back strongly helped by the US markets which ended sharply up yesterday after dovish comments from the Fed and a rise in crude prices on fall in inventory data," said Sanjeev Zarbade, Vice President, Private Client Group Research, Kotak Securities.
Fed Chair Janet Yellen said Fed is unlikely to start its rate hike process for "at least the next couple of meetings." Federal Reserve retained the phrase "considerable time" in its policy statement and also introduced another word "patient", he added.
The 50-issue Nifty of NSE reclaimed 8,100 level by rising 129.50 points or 1.61 percent to end at 8,159.30.
Local good news about Cabinet approving constitutional amendment for GST added cheer and helped markets gain, said Jayant Manglik, President, Retail Distribution.
"Post the Fed meet, volatility in equity, commodity and currency has subsided.... (Fed Chair) Janet Yellen continued dovish stance .... This is good for emerging markets," said Snjeev Zarbade, Vice President, Private Client Group Research, Kotak Securities.
Rise in ICICI Bank, L&T, Infosys, HDFC Bank, Tata Motors, Axis Bank, RIL, Maruti Suzuki, SBI, ITC and HDFC together contributed over 300 points to the sensex kitty.
Among the BSE sectoral indices, consumer durables flared up by 5.26 percent, Power 3.26 percent, consumer goods 2.78 percent, Bankex 2.49 percent, Realty 2.47 percent, Auto 2.06 percentand metal 2.00 percent.
The total market breadth turned sharply positive as 2,172 stocks advanced while only 683 declined. Total market turnover was approximately at Rs 3,013 crore.
On the global front, barring China and South Korea which closed just in the red others like Hong Kong, Japan, Singapore and Taiwan ended higher between 0.51-2.32 percent.
European market were too were quoting strong in their late morning deals. CAC was up by 1.84 percent, the DAX by 1.85 percent and FTSE by 0.52 percent.

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