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Benchmark indices have extended gains and are trading at two and half years high led by rate sensitive sectors like banks, auto and realty.
The US Federal Reserve late Wednesday surprisingly decided to continue with its $85 bn-a-month bond-buying program for at least another month sent. Fed said it needs to see more evidence of improvement in the US economy.
At 15:00 PM, the 30-share Sensex rose 715 points at 20,677 and the 50-share Nifty added 225 points at 6,124 levels. The 30-share Sensex is at its highest level since January 2011 in intra-day trades today on expectation that fund flows into emerging markets including India would continue as the US Federal Reserve's surprisingly decided to continue its stimulus programme.
The broader markets are underperforming the benchmark indices- BSE Midcap and Smallcap indices are up 1-2%. The market breadth in BSE remains
According to Chetan Jain, Deputy Manager (Derivatives Desk) - Equity Research, Anand Rathi Financial Services, “Nifty future has gained more than 700 point in this expiry. Post FED Event markets today gap up significantly with drastic fall in INDIAVIX by more than 10%. Now Nifty future has reached to crucial hurdle zone around 6100-6150 levels if it holds these levels then further short covering rally toward life time high territory could not be ruled out whereas if does not hold the current levels then a profit booking dip of 150-200 points may be seen.”
ASIAN MARKETS
Asian shares and currencies flew higher on Thursday after the Federal Reserve stunned markets by choosing not to taper its asset-buying programme for now, sending global bond yields and the dollar into a tailspin.
From Jakarta to Manila, Tokyo to Sydney investors celebrated the prospect of prolonged stimulus in the world's largest economy. MSCI's broadest index of Asia-Pacific shares outside Japan jumped 2.3% to a four-month peak.
Indonesia's main stock index climbed 4.4%, the Philippines 3.1%, Australia 1.1% and Japan's Nikkei 1.8%.
RUPEE
The rupee surged as much as 2.8% on Thursday, hitting its highest in a month, as the U.S. Federal Reserve's decision not to dial back its easy money policy is expected to provide a reprieve to the Reserve Bank of India (RBI) in its policy making.
SECTORS
BSE Bankex and BSE Realty index have surged between 6-7%. Sectors like Capital Goods, PSU, FMCG, Metal, Oil & Gas, Consumer Durables, Auto and Power have gained between 3-4%. Infact, all the major BSE sectoral indices are trading in safe zone.
STOCKS
Shares of rate sensitive sectors such as automobiles, real estate, infrastructure and banking have rallied up to 17% on hopes that the Reserve Bank of India (RBI) may roll back its tightening measures taken in order to contain the forex volatility in its monetary policy review on tomorrow.
The National Stock Exchange (NSE), CNX Auto, CNX Realty, CNX Infra and Bank Nifty are up 4-7% as compare to 3% rise in benchmark index CNX Nifty.
YES Bank, ICCI Bank and Axis Bank from banking, DLF, HDIL and Unitech from realty, Maruti Suzuki and Mahindra and Mahindra from automobiles are among few trading higher by over 6% each.
Banking stocks zoomed by about 7% trade as the US Federal Reserve announced its intention to leave its stimulus programme intact.
Analysts said that the move by Fed is expected to benefit banks the most on account of foreign currency loans taken by them.
"In the past 15 months or so, banks had taken huge exposure in terms of dollar loans from the external market. The continuing of the QE3 stimulus programme would mean higher demand for banking papers in the external market," said G Chokkalingam.
Bharti Airtel has rallied over 5% on reports that Singapore Telecommunications Ltd (SingTel), the largest foreign investor in the company pledges support to lead a consolidation drive of the local telecoms industry.
Other notable gainers are Tata Steel, ONGC, L&T, Tata Power, HUL and GAIL.
This year's best performing sectors--information technology and consumer goods--underperformed as stocks in the high beta, rate sensitive sectors, including banking, realty and auto surged.
Wipro is down by over 2%.
