Markets up on Federal Bank's rate cut buzz

Expecting a rate cut at the next week's Federal Reserve meeting, the benchmark BSE index, Sensex, rallied 109.08 points on Thursday to end at 15,614.44 points, up by 0.7 per cent. The broad-based Nifty-50 closed at 4528.95 points, up 0.71 per cent or 32 points.

Hogging the limelight were interest rate sensitive stocks, including auto, banks and real estate scrips. Interestingly, the optimism in the real estate sector was also extended to the cement stocks too , anticipating moderate interest rates.

A rate cut by the Fed will put pressure on the Reserve Bank of India to follow suit since a gap in the interest rate will result in more capital inflow into the country, which may send the rupee soaring.

Maruti Udyog (up to Rs 892.10 a share or 3.82 per cent), State Bank of India (up to Rs 1675.85 a share or 3.18 per cent) and cement major ACC (up to Rs 1128.80 a share or 2.45 per cent) were the top gainers.

Nifty futures for September delivery climbed 0.9 per cent to 4,527. Heavy buying was also witnessed at the Reliance Industries (up by 1.56 per cent) counter after the company secured the government nod to sell natural gas at $4.20 per million units.

The BSE has chosen realty company DLF in two of its indices, the BSE 100 and BSE 200, in place of the Reliance-owned IPCL.

The BSE realty index was the highest gainer (up 7847.86 points or 2.69 per cent) with Mahindra Gesco up by nearly 7.25 per cent.

The BSE Auto index and Bankex gained up to 1.30 per cent.

Hindustan Unilever (down to Rs 215 a share or by 0.97 per cent) was the top loser. Metals suffered with Hindalco industries (down to Rs 153.95 or 0.81 per cent) reducing prices for the sixth time this year to match the global rates.