News from US lifts Sensex

Up 362 points to 13,308, highest closing since February 27.

Stocks surged to a three-week high today after the US Federal Reserve abandoned its bias towards a hike in interest rates, fueling optimism that the US demand for products from Indian exporters, especially the IT sector, would not slow down.

The benchmark Sensex soared nearly three per cent or 362.15 points to 13,308.03. This is the highest closing for the index since February 27, when it ended at 13,478.83.

In the last four trading sessions starting Monday, the Sensex has scaled 878 points, making it the third biggest four-day rally since its inception in 1979. The four-day rally has increased investor wealth by Rs 184,794 crore, with 57 per cent of the stocks gaining in prices and 39 per cent recording a fall.

In June 2006, the Sensex had gained 1,068.40 points in just three trading sessions, going up from 8,929.44 on June 14 to 9,997.84 on June 19.

The broader Nifty-50 Index also rose by about three per cent or 111.35 points today, ending the day at 3,875.90.

Stocks across Asian markets, which rely on the US for most of their exports, climbed after the Fed removed a reference to "additional firming" in a statement accompanying its latest interest-rate decision. The US central bank held the benchmark rate at 5.25 per cent for the sixth meeting.

Banking and auto stocks led the gains at the domestic bourses. All except one (Grasim Industries) of the 30 Sensex stocks ended in positive territory.

Public sector BHEL, which rose by 6.04 per cent to Rs 2,230.05, was the biggest gainer. HDFC Bank (up 5.93 per cent to Rs 1,023.25), Maruti Udyog (up 4.95 per cent to Rs 831.10), ONGC (up 4.87 per cent to Rs 852.25) and State Bank of India (up 4.72 per cent to Rs 1,028.50) were the other big gainers.

Shares of Reliance Industries, which said it was exploring with Rohm and Haas Co of the United States joint setting up of an acrylic-monomer plant in India, rose by 2.55 per cent to Rs 1,374.25.

"The markets have been volatile with a negative bias since the Budget. Now, there is some amount of buying coming in as the valuations look attractive," said Prateek Agarwal, head of equities at ABN-AMRO Mutual Fund. "Foreign investors, which were seen pulling out money from emerging markets, it seems, are coming back," he added.

Among sectoral indices, the BSE Bankex was the biggest gainer with a rise of 4.31 per cent, followed by BSE Capital Goods Index (up 3.76 per cent) and BSE Auto Index (up 3.76 per cent).