Markets up 2% on Fed rate cut

Stock markets shot up nearly 4 per cent immediately after opening, mirroring the positive sentiment in other Asian markets owing to the unexpected cut in the discount rate by the Federal Reserve on Friday.

However, they failed to sustain the early momentum and ended losing nearly half of the gains after investors booked profits due the UPA-Left impasse on the Indo-US nuclear deal, causing a political stalemate.

The benchmark BSE Sensex closed higher by 286.03 points, or 2.0 per cent, at 14,427.55, ending the three-day losing streak. The broader Nifty of the National Stock Exchange (NSE) managed to gain 101 points, or 2.46 per cent, to close at 4,209.05.

Experts attributed Monday's rise in domestic markets to the reversal in market sentiment across the globe after the rate cut by the Federal Reserve on Friday. The Asian indices too registered a strong pull-back. 
  

CAUTIOUS OPTIMISM How they fared
	* % Change
Straits Times	6.12
Hang Seng	5.93
Kospi	5.69
FTSE	7.07
Nikkei 225	3.00
Sensex	2.02
* Over Previous Close

Foreign investors, however, continued to be net sellers in the country. Their net sales were Rs 648.93 crore today, taking the total in August to Rs 12,469.25 crore.

Most US stocks rose in initial trade today after Lowe's, the second-largest US home-improvement retailer, reported profits that topped analysts' estimates, spurring speculation that the housing slump will not extinguish earnings growth.

The S&P 500 added 0.23, or 0.02 per cent, to 1,446.17 at 9 p m. (local time). The Dow Jones Industrial Average was down 77.71 points to 13,001.37. The Nasdaq Composite Index was down 11.65 points to 2493.38.

However, dealers said few investors in the Indian markets wanted to carry forward their positions and even those who did not get a chance to sell stocks last week were trying to exit.

Investors are also cautious ahead of the Bank of Japan meeting scheduled on Wednesday.