Amid massive foreign fund inflows followed by US Fed chief Janet Yellen’s softened stance on rate hike, the BSE benchmark Sensex surged 438 points to 25,338.58 on Wednesday, while NSE Nifty reclaimed the 7,700-mark by gaining 138.20 points or 1.82 per cent to 7,735.20 on value-buying - mostly in domestic stocks such as banking, metal, capital goods and pharma sectors.
Similarly, Asian and European markets cheered the Fed’s move on Tuesday that the central bank needed to proceed cautiously on raising interest rates in midst of global risk factor. Moreover, investors’ hope on rate cut of Reserve Bank of India (RBI) next week at its monetary policy review on Tuesday also accelerated buying spree.
The rupee, rising by close to 20 paise against the dollar, also had its bearing on the market. “Being the eve of derivatives expiry, caution was the watchword, especially early in the day. However, that did not dampen sentiment,” said Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, adding that Asian Development Bank (ADB) lowered 2016-2017 growth forecast, but expectations of a RBI rate cut soon seems to be encouraging investors.
The 30-share BSE Sensex opened gap-up at 25,062.06 and traded between 25,358.84 and 25,055.42 before ending at 25,338.58, showing a rally of 438.12 points or 1.76 per cent. The gauge had lost over 437 points in the last two days. Tata Steel emerged as the best performer and closed 6.75 per cent up at Rs324.40 after the Government extended the safeguard duty on some steel imports by two years till March 2018, to protect domestic industry.
Sun Pharma ended 2.21 per cent higher at Rs811.60 as the drug major forayed into Japanese prescription market by acquiring 14 brands from Swiss drug firm Novartis for over Rs1,940 crore. lupin too bounced back, surging over 5 per cent, after the company said the USFDA observations about Mandideep facility were ‘minor in nature’.