Mumbai: Bullish sentiments prevailed at the Indian equities markets a day after the US Federal Reserve decided to further postpone its rate hike, leading a barometer index to gain more than 300 points in the late-afternoon trade session on Thursday.
The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE) gained more than 300.42 points or 1.12 percent during the session under review.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also made gains during the late-afternoon session. It was trading with gains of 81.35 points or 1.01 percent at 8,172.90 points.
The Sensex which opened at 26,916.99 points, was trading at 27,133.08 points (at 3.00 p.m.), up 300.42 points or 1.12 percent from the previous day’s close at 26,832.66 points. The Sensex touched a high of 27,175.39 points and a low of 26,910.26 points in the intra-day trade so far.
According to Angel Broking, the Indian markets opened higher tracking the SGX Nifty and global cues. “Indian markets rose for a fourth straight session on Wednesday, mirroring a mostly positive trend in global markets,” the firm said.
On Thursday, the US Federal Reserve decided not to raise interest rates in June, but signalled that the long-awaited rate hike could come in September as the economic activity picks up.
“The committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace,” the US central bank also known as the Fed said after a two-day policy meeting of the Federal Open Market Committee.
But the committee lowered its projections for economic growth significantly. In March, committee members projected 2015 growth would be between 2.3 percent and 2.7 percent.
“When the committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent,” it said.
The Fed had slashed interest rates to near 0 percent in December 2008 to help rejuvenate the battered economy.
The Fed has not actually raised rates in almost a decade and low interest rates and analysts saw little chance of the Fed raising rates at its June meeting.
The economy contracted in the first three months of 2015 while inflation and consumer spending remained tepid. Though it regained some momentum in spring, it was not enough to justify a June rate hike.
The US Fed’s stand that the rate hike might take place in the later part of the year might effect the Indian markets.
With higher interest rates in the US, the FPIs (Foreign Portfolio Investors) are expected to be led away from the emerging markets such as India.
During the intra-day trade on Thursday, healthy buying took place in the oil and gas, automobile, healthcare, consumer durables, banks and capital goods stocks. However, metal and realty scrip came under selling pressure.
The S&P BSE oil and gas index zoomed by 237.29 points, followed by the automobile index augmented by 218.12 points, healthcare index edged-higher by 184.41 points, consumer durables increased by 176.52 points, banking index rose by 166.95 points and capital goods index was up by 106.83 points.
The S&P BSE metal index was down by 7.43 points and realty index slipped by 6.30 points.
