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Market Update: Sensex closes higher on hopes Fed will retain low rates

Stocks of IT companies that get more than 60 per cent of their revenue from the US led rebound on the exchanges as buying intensified.

twitter-logo PTI   Mumbai     Last Updated: September 17, 2014  | 16:59 IST
Sensex closes higher on hopes Fed will retain low rates
(Photo: Reuters)

Snapping a two-day downtrend, the benchmark Bombay Stock Exchange (BSE) Sensex on Wednesday closed over 138 points up on the back of gains in IT, power and auto scrips amid positive global sentiments on hopes the US Federal Reserve would keep interest rates low for now.

The 30-share Sensex closed at 26,631.29 points, up by 138.78 points (or 0.52 per cent) over last close after rising to 26,682.64 intra-day.

In the previous two sessions, the index lost 568.53 points as foreign funds and retail investors pulled off cash off the table on fears the Fed will bring forward its timetable for hiking rates as the economy picks up speed. BSE barometer

The 50-share National Stock Exchange (NSE) Nifty also rose by 42.60 points, or 0.54 per cent to 7,975.50, ending two straights days of decline.

Global markets in Asia and Europe also rose on speculation China will give its banks some fresh loans.

"Speculation that Fed would maintain its interest rates low and boost growth for now and that China's central bank will provide the country's big banks with fresh loans, keep markets and commodities markets globally upbeat," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.

Stocks of IT companies that get more than 60 per cent of their revenue from the US led rebound on the exchanges as buying intensified.

Infosys gaines 2.29 per cent, TCS rose 1.31 per and Wipro was up 1.41 per cent.

Dr Reddy's surged 2.52 per cent, logging the best gains among the 30 Sensex scrips.

Other gainers which supported the 30-share BSE barometer were Tata Power, Tata Motors, Tata Steel, BHEL, Bajaj Auto, Maruti Suzuki, M&M, Hero MotoCorp, ITC, L&T and RIL.

On the other hand, 10 Sensex stocks ended down led by Cipla and Coal India.

With the improvement in the market's scenario, the mid-cap and small-cap indices also turned active with buying seen in several of its constituents. Mid-cap index was up 0.25 per cent and Smallcap rose 0.31 per cent.

Sectorwise, IT index outshined other sectors. The BSE IT sector index gained the most by rising 1.52 per cent, followed by Power sector index (up 1.35 per cent), Teck index (1.26 per cent), Auto index (1.02 per cent), Capital Goods index (0.81 per cent) and Realty index (0.51 per cent).

FMCG index (0.26 per cent), Healthcare index (0.28 per cent) and Oil & Gas index (0.21 per cent) and Metal index (0.27 per cent) also gained moderately.

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