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Fed effect: BSE Sensex zooms 685 points to three-year high

The rise in Indian stock markets, which made investors richer by a staggering Rs 1.84 lakh crore, was a part of the global rally in equities as fears of immediate foreign institutional investor (FII) outflows lessened after Fed's decision to leave economic stimulus untouched.

BT Online Bureau | September 19, 2013 | Updated 17:22 IST
Stock traders cheer the Sensex's rally
Stock traders cheer the Sensex's rally with sweets. Photo: Reuters

The BSE Sensex galloped by 685 points to close at nearly 3-year high on Thursday on massive buying in interest-sensitive sectors after US Fed's decision to leave economic stimulus untouched spurred hopes that the Reserve Bank of India (RBI) will ease monetary policy on Friday.

Thursday's gains are the biggest since 727 point-rise on September 10.

Observing America's economic growth has been proceeding at a moderate pace amid uneven improvement in labour market conditions, the US Federal Reserve had on Wednesday decided to maintain status quo on its monthly $85 billion bond-buying programme.

The rise in Indian stock markets, which made investors richer by a staggering Rs 1.84 lakh crore, was a part of the global rally in equities as fears of immediate foreign institutional investor (FII) outflows lessened after Fed's decision.

Rising for the fourth straight day, the Sensex spurted by 684.48 points, or 3.43 per cent to end at 20,646.64 - a level last seen on November 10, 2010.

Twenty-eight constituents of the 30-share Sensex gained with ICICI Bank, ITC, HDFC Bank, HDFC, L&T and SBI contributing heavily. RIL, ONGC, Tata Motors, Bharti Airtel, Tata Steel also gained.

Overall in BSE, 1430 stocks rose while 997 scrips fell.

The 50-share National Stock Exchange index surged 216.10 points, or 3.66 per cent to 6,115.55, after touching a high of 6,145.50. Also, SX40 index, the flagship index of MCX-SX, closed at 12,232.1, up 430.52 points or 3.65 per cent on Thursday.

"There was relief among emerging markets in a salute to Fed's Taper Hold decision. Indian markets also rose on reduced threats of foreign money as well as in anticipation of a favourable policy from the new RBI Governor," said Dipen Shah, Head - Private Client Group Research, Kotak Securities.

The banking index gained the most by rising 6.78 per cent as the 13 constituents surged by up to 23 per cent. SBI shot up by 8.07 per cent, ICICI Bank by 6.55 per cent, HDFC Bank by 5.13 per cent and Yes Bank by 22.54 per cent.

Shares of oil retailers gained as a rally in the rupee against the dollar was seen easing concerns about higher cost of crude oil imports. HPCL, ONGC, BPCL and IOC rose.

The rupee was trading at 61.8 versus the dollar, up over 150 paise, when stock markets closed for the day.

With inputs from PTI

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