Enjoy the easy money while it lasts — is the message that the US Federal Reserve gave global investors on Thursday by retaining interest rate at near zero levels. The resulting flood of foreign inflows gave both the Sensex and the Nifty their biggest single-day gain in three months.
Rising optimism over India’s trade ties with China also boosted sentiments as the benchmark Sensex surged 481 points, or 1.8%, to end at 27,112.21. The broader NSE Nifty settled at 8,114.75, a gain of 139 points.
“There is a relief in the market after the outcome of the two-day US Fed meeting, which did not result in any major announcements,” said Dipen Shah, head, private client group research, Kotak Securities.
“This is critical for India under current circumstances when the domestic economy is undergoing a healing process. Some additional support in the form of global liquidity would augment this recovery process,” said Debopam Chaudhuri, chief economist, ZyFin Research.
Foreign portfolio investors who bought a net $14.14 billion in shares so far this year, have been key market drivers.
China’s commitment to invest $20 billion in India over the next five years also aided the rally. “Participants were truly excited by the prospects of huge investments by China in India’s infrastructure projects,” said Devang Mehta, senior vice-president, Anand Rathi Financial Services.
Major Sensex gainers included Hero MotoCorp (up 5.6%), HDFC (up 3.7%) and BHEL (up 3.5%).
Among sectoral indices, realty rose 4.7% followed by consumer durables (up 3.2%), capital goods (up 2.8%) and power (up 2.2%).
In the broader market, the BSE midcap index gained 177 points to 9,861.22 and the BSE smallcap index rose 291 points to 11,121.16.
Total market breadth was positive as 2,235 stocks ended in the black, 827 finished in the red while 94 closed unchanged.
“After the steep recovery, it’s likely that markets would pause on Friday; however, stock-specific move will keep the traders busy,” said Jayant Manglik, president, retail distribution, Religare Securities.
(with agency inputs)