Indian markets on Thursday logged their best daily gain since May 12 with Sensex jumping 481 points to 27,112.21 and Nifty soaring over 139 points to 8,114.75 bolstered by Fed’s continued pledge to retain rates at low levels and rising optimism over trade ties with China.
Fuelled by foreign funds buying, all the 12 sectoral indices closed with gains between 0.58 per cent and 4.65 per cent. Realty, consumer durable, capital goods, auto, power and banking were the pacesetters in the surge.
The benchmark S&P BSE 30-share Sensex resumed lower and touched a low of 26,503.08. It, however, quickly rebounded in line with positive Asian trends to cross 27K-mark and hit high of 27,132.20, before settling at 1-1/2-week high of 27,112.21 — a rise of 480.92 points or 1.81 per cent. Previously, it had zoomed 556.77 points or 2.42 per cent on May 12.
Similarly, the 50-share NSE Nifty regained 8,100 level and touched the day’s high of 8,120.85 before settling 139.25 points higher at 8,114.75. Previously, it had zoomed 155.45 points on May 12.
In a statement, the US Federal Reserve Chairwoman Janet Yellen on Wednesday in its policy setting meeting promised to keep the interest rates near zero for a “considerable time after its bonds buying programme comes to an end in October, giving immediate relief to the emerging markets, including India as fears of immediate capital outflows have subsided.
Meanwhile, India on Thursday signed a 5-year trade and economic cooperation agreement with China with a view to improve the trade balance and obtain USD 20 billion Chinese investments.
“With US rate rise possibilities becoming a more distant reality, emerging economies including India can expect to keep their hot monies ‘hot’ for some more time,” said Debopam Chaudhuri, Chief Economist, ZyFin Research.
Major Sensex gainers were Hero Motocorp (5.67 per cent), HDFC (3.73 per cent), Tata Motors (3.70 per cent), L&T (3.57 per cent), BHEL (3.51 per cent) and Bajaj Auto (3.47 percent).
Participants were truly excited by the prospects of huge investments by China in India’s infrastructure, railway & manufacturing projects, according to Devang Mehta, Sr. VP & Head – Equity Advisory, Anand Rathi Financial Services.
Asian stocks gained in choppy trade after the US Federal Reserve after a two-day policy meet renewed a pledge to keep interest rates near zero for a considerable time and announced a further USD 10 billion reduction in monthly bond purchases.
Key benchmark indices in China, Singapore, Taiwan and Japan rose by 0.02 per cent to 1.13 per cent, while indices in Hong Kong and South Korea fell 0.72 per cent to 0.85 per cent.
Europe was also trading higher as indices in France, Germany and the UK moved up by 0.34 per cent to 0.60 per cent.
Jignesh Chaudhary, Head Of Research, Veracity Broking Services said: “Indian equities continued to trade strong for the second day with the help of bluechips as global equities traded strong after the Fed stated that rate hikes would not happen for a considerable time.”
In the 30-share Sensex pack, 28 scrips ended higher while only two finished lower.
Major gainers include Dr Reddy’s Lab (3.34 per cent), Tata Power (2.86 per cent), Maruti Suzuki (2.48 per cent), NTPC (2.43 per cent), Wipro (2.40 per cent), ICICI Bank (2.37 per cent), SBI (2.21 per cent), TCS (1.86 per cent), Axis Bank (1.73 per cent) and Reliance Industries (1.67 per cent).
However Infosys dropped 1.08 per cent and HUL fell 0.58 per cent.
Among the S&P BSE sectoral indices, Realty rose by 4.65 per cent, Consumer Durables 3.17 per cent, Capital Goods 2.84 per cent, Power 2.23 per cent, Bankex 1.98 per cent, Healthcare 1.76 per cent, Oil&Gas 1.61 per cent and Metal 1.23 per cent.
“After steep recovery, its likely that markets would witness pause on Friday; however, stock specific move will keep the traders busy,” said Jayant Manglik, President-retail distribution, Religare Securities.
Total market breadth turned positive as 2,235 stocks closed in the green, 827 finished in the red while 94 ruled steady.