Indian markets closed at record high on Thursday with the Nifty touching all-time high tracking firm Asian and US bourses after the dollar weakened on US Federal Reserve’s comment that further interest rate hikes will be “gradual”.
On Wednesday, Fed hiked key policy rates by 25 basis points or 0.25 percentage point to a range of 0.75-1.00%, as it was expected, but global investors took comfort from the stance of a slower pace of tightening going forward. Earlier, market experts were expecting rapid rate hikes that could have led to capital outflow from riskier assets and emerging markets.
The 30-share benchmark Sensex rose as much as 217 points or 0.7% to touch 29614.79 in early trade and finished up 188 points or 0.64% higher at 29,585.85. The Nifty gained 0.76% to close at all-time high of 9,153.70.
Metal and oil stocks gained on global commodity rally after dollar weakened as Fed indicated gradual tightening. The BSE Metals index was up 2.9% while BSE Oil & Gas gained 0.8%, BSE Power 1.8%.
Adani Ports led the Sensex chart gaining 4.7% followed by Tata Steel 4.3%, Bajaj Auto 2.3%, Asian Paints 2.2%, Infosys 1.6% and Tata Motors 1.5%.
Asian markets were up tracking solid gains at the Wall Street. The MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9% to its highest since mid-2015.
Nikkei was down in early trade as yen strengthened against the dollar and cut export competitiveness of Japanese firms but ended up 0.07%. Hang Seng closed up 2.1%, Kospi and Strait Times 0.8% each and Shanghai 0.9%.
In the US, Dow Jones Industrial Average closed up 0.5%, while the S&P 500 gained 0.8% and the tech-heavy Nasdaq 0.7% on Wednesday.
The dollar plunged against major currencies after the Fed signaled a more gradual pace of monetary tightening this year, contrary to what the market was expecting.
The dollar index fell to two-week lows and touched 100.78, down 0.9%. The euro rose to five-week highs against the dollar and hovered around $1.0696, up 0.9%. The greenback was down to a two-week low against the yen and UK sterling.
Fed said in its policy statement it was sticking to the outlook for two more rate hikes this year and three more in 2018 as the job market was buoyant and inflation was closer to its medium term target of 2%. The Fed last hiked rates once in December 2016.