Monday , December 5 2016
Home / Business / Financials / Market shapes up, Sensex bounces 359 pts on Fed bets

Market shapes up, Sensex bounces 359 pts on Fed bets

Sensex3_6

Mumbai :Marking a spectacular recovery from two-month lows, the benchmark BSE Sensex today vaulted over 359 points—its biggest single-day gain in nearly seven weeks—tracking strong Asian markets on expectations that the US Fed would proceed with caution on more tightening.

A firm trend prevailed in Asia after the minutes of US Fed meeting showed that it’s ready for a December lift-off provided subsequent actions are strongly tied to consistent improvements in the economy. The minutes are practically a vote of confidence in the health of the world’s largest economy and a boon for the banking sector.

There was more good news in store as the government as part of its efforts to revive exports yesterday announced a 3 per cent interest subsidy scheme for exporters running for 5 years, brokers said. A strong reading in the rupee, at 66.18, against the dollar, drove the gains.

The 30-share Sensex ended up by 359.40 points, or 1.41 per cent, at 25,841.92 — its biggest single-day gain since October 5. The gauge had lost 381.95 points in the previous session.

Except the healthcare index, all sectoral indices led by consumer durables and IT ended in the positive zone with gains up to 1.93 per cent. The broad-based NSE Nifty reclaimed the 7,800-level before settling at 7,842.75, up 110.95 points, or 1.43 per cent.

“The government’s intention to push reforms just before the start of the winter session of Parliament is being taken positively by the market,” said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services Ltd.

“Additionally, the FOMC minutes appear to indicate that the US rate hike will only be a gradual increase, which is positive for EMs since they are already under pressure due to FII outflow.” Bajaj Auto surged the most, up 3.33 per cent, while Vedanta Ltd, HDFC, Infosys and Maruti Suzuki all supported the upside.

Except healthcare, all sectoral indices led by consumer durables and IT ended in the positive zone, with gains up to 1.93 per cent. Broader markets such as BSE midcap and smallcap too ruled high, up 1.2 per cent and 1.3 per cent, respectively.

Foreign portfolio investors (FPIs) continued to dump equities as they net sold shares worth Rs 768.46 crore yesterday, as per provisional data. Europe was trading in line with the broad trend, where stocks were in the green.

PTI