Markets await Fed move

Volatility marked Wednesday's trading as the benchmark indices ended with marginal gains on expectations of yet another rate cut by the US Federal Reserve.

The Sensex added 54.48 points, or 0.3 per cent to 19,837.99 and the Nifty climbed by 31.90 points, or 0.5 per cent, to 5,900.65 on Wednesday.

Bombay Stock Exchange's Sensex has surged by 14.7 per cent this month to record its largest monthly gain since December 2003.

Analysts believe that the Reserve Bank of India would be forced to further restrict bank lending as the declining US interests rates would prompt investors to pump record cash into the world's second fastest growing market.

"The trend is bullish. We expect a major announcement by an index heavy company to lift the markets further," said a local broker.

RBI hiked the cash reserve ratio by a steep 50 basis points to 7.5 per cent, in its mid-term review of the annual monetary policy yesterday.

Among the top Sensex gainers on Wednesday, Reliance Energy went up by 4.34 per cent to Rs.1,866 and NTPC rose 2.33 per cent to Rs 239. ONGC gained 2.32 per cent to Rs.1,247 as the rising crude prices boosted its profits for the July-September quarter.

Huge buying interest was witnessed in the small and the mid-cap sectors. The BSE mid-cap index gained 1.08 per cent and the BSE small-cap index was up by 1.58 per cent.

Ajay Pandey, assistant vice president of Systematix Shares and Securities said, "Some of the companies in the mid and small-cap index have a tremendous potential and the results too were robust."