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Investor risk appetite returned on Thursday after oil prices steadied and minutes of the US Federal Reserve meeting confirmed it wouldn’t raise interest rates before late April. Indian equities rebounded from a three-week low, while the rupee gained the most in three weeks against the dollar.
Recovering from a 900-point fall, the benchmark BSE Sensex gained 1.4 per cent, or 365.9 points to 27,274.71, led by banks and power stocks. The NSE Nifty gained 1.6 per cent, or 132.5 points to 8,234.6 following three days of decline. The rupee gained the most in three weeks to close at 62.67, compared to the previous day’s close of 63.17, as foreign investors continued to pour money in the debt market, even as they pulled out money from equities.
Most Asian markets ended more than one per cent higher. European markets traded firm after the Bank of England maintained status quo on the benchmark interest rate and asset purchases. US futures pointed to a positive move.
“The Sensex re-bounced strongly on the back of positive global cues. The rally in global markets was led by crude oil, which halted its slide. Concerns about a Greek exit eased; investors took the Fed minutes positively,” said Sanjeev Zarbade, vice-president, private client group research, Kotak Securities.
According to provisional data, foreign institutional investors (FIIs) sold shares worth Rs 467 crore, taking their three-day selling tally to nearly Rs 3,000 crore. Domestic institutions continued to remain net buyers, of shares worth nearly Rs 290 crore on Thursday.
“The Fed minutes has helped, and the rupee has found stability. Domestic buyers have provided support, while FIIs are selling due to global issues,” said Vinod Nair, head-fundamental research, Geojit BNP Paribas Financial Services.
Most Fed officials agreed their commitment was to be “patient”, which meant there would be no increase in near-zero borrowing costs before late April, said a Bloomberg report, citing the minutes of its December meeting. Meanwhile, crude oil futures rebounded 1.5 per cent in New York trading.
On Wednesday, Brent Crude fell below $50 a barrel—lowest since April 2009—raising concerns over the health of the world economy.
ICICI Bank, HDFC Bank and HDFC each added over two per cent, while Tata Motors, which gained 3.7 per cent, was the biggest-performing Sensex component. The BSE Mid- and Small-cap indices outperformed the benchmarks.
