Bernanke calms investors' nerves

Sensex gains 2% in global stock rally

The comments of US Federal Reserve Chairman Ben Bernanke - that the US central bank might not roll back its stimulus programme earlier than expected - came as a shot in the arm for global markets on Thursday. Indian stocks rose on expectations that foreign institutional investors (FIIs) would resume purchase of equities here. The rupee, however, weakened, as importers bought dollars.

FIIs net-bought shares worth Rs 638.26 crore on Thursday, according to provisional data.

The optimism seen in Asian markets had a rub-off on US markets, too. By the time of going to press, the Dow Jones Industrial Average had risen 0.86 per cent, or 130.9 points, to 15,422.6. The Nasdaq was up 1.3 per cent, or 45.7 points, at 3,566.52.

Bernanke had said late Wednesday evening that a highly accommodative monetary policy was needed in the foreseeable future, adding the unemployment rate in the US had overstated the health of the country's job market. (HIGH ON HOPES)


On June 20, Bernanke had sent markets into a tizzy when he said the Federal Reserve would consider scaling back the third round of its bond-buying programme, also known as quantitative easing (QE) 3, by the end of the year. Stocks, as well as currencies, in the emerging markets had crashed following the Fed chairman's comments, as investors feared a slowdown in QE3 would reduce FII inflows to a trickle or even cause sharp outflows from stocks.