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Sensex paces up 266 points as Fed holds fire


Mumbai: Market benchmark Sensex rebounded by 266 points today to close at over two-week high of 28,773.13 and the NSE Nifty went past the 8,800-mark, tracking upbeat global cues after the US Federal Reserve left rates unchanged. Moreover, trading sentiment got a boost after the current account deficit (CAD) narrowed sharply to just USD 300 million, or 0.1 per cent of GDP in the June quarter, driven by lower trade deficit on deeper import contraction. The rally in domestic equities was largely in line with the upmove seen in global stocks driven by the US Federal Reserve’s decision not to lift interest rates.

Aurobindo Pharma surged over 6 per cent as the company received tentative approval from the USFDA to manufacture and market Dolutegravir, used for the treatment of HIV, in the US. However, select software exporter stocks, like TCS and Wipro, saw selling pressure following weakness in the dollar against the rupee. Software exporters’ almost 60 per cent revenue comes from the US and European markets. “Markets praised Fed’s decision as the global bond yield reverted and rupee strengthened. Due to a neutral statement, the market believe that the risk for December 16 rate hike is roughly balanced adding positive sentiment,” said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.

The 30-share Sensex after scaling the day’s high of 28,871.92, closed 265.71 points or 0.93 per cent higher at 28,773.13, a level last seen on September 9, when it had closed at 28,797.25. The 50-share NSE Nifty reclaimed the key 8,800-mark to hit a high of 8,893.35 before winding up at 8,867.45 points, up by 90.30 points, or 1.03 per cent. Both the indices, Sensex and Nifty, posted their biggest single day gains since September 6.

Meanwhile, the government today appointed three members on the Monetary Policy Committee (MPC), who along with RBI nominees are likely to set the benchmark interest rate in the upcoming monetary policy review with a view to contain retail inflation at the targeted level of 4 per cent. Broader markets too displayed a bullish trend with mid-cap and small-cap indices rising 1.39 per cent and 1 per cent, respectively, as investors widened their portfolios. Asian stocks ended up with key indices like China, Hong Kong, South Korea and Taiwan rising by 0.07 per cent to 0.67 per cent. Europe was higher too as indices in France, Germany and the UK jumped by up to 1.65 per cent.


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