Sensex Today: An unexpected dovish tone from the US Federal Reserve cheered market participants on Thursday. The S&P BSE Sensex zoomed 490 points, or 0.77 per cent, to end at 64,081 levels, while the Nifty50 ended at 19,133, up 144 points or 0.76 per cent.
The US Federal Reserve Chairman Jerome Powell’s comment that “despite elevated inflation, the longer term inflation expectations remain well anchored” was taken by the market as a slightly dovish statement.
The implication of this statement, analysts said, is that the Fed may not hike rates again in this rate hiking cycle.
On the bourses, Britannia Industries, Hindalco, Apollo Hospitals, Sun Pharma, IndusInd Bank, Tata Motors, Infosys, Axis Bank, HUL, Tata Steel, HCL Tech, NTPC, Bharti Airtel, TCS, Nestle India, SBI, RIL, and Power Grid advanced between 1 per cent and 3 per cent.
The broader markets, meanwhile, outperformed the benchmarks with the BSE MidCap index up 1.2 per cent, and the BSE SmallCap up 0.97 per cent.
Sectorally, all the indices cornered gains with the Nifty Realty index rising 2.38 per cent, the Nifty PSU Bank index adding 1.5 per cent, and the Nifty Metal index up 1.55 per cent.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “The Fed chief Jerome Powell’s comment that “despite elevated inflation, the longer term inflation expectations remain well anchored” was taken by the market as a slightly dovish statement. The implication of this statement is that the Fed may not hike rates again in this rate hiking cycle. Consequently the bond yields declined sharply. The benchmark 10-year bond yield declined 17 bp to 4.75 per cent and the equity markets responded positively. In the near-term, the dollar index at 106.3, Brent crude at around $85 and the 10-year US bond yield at 4.75 % are favourable for stock markets.”
“There is a possibility that the FIIs, who were sustained sellers in October, may turn buyers and if that happens, short-covering can take markets higher despite the uncertainty surrounding the Israel-Hamas conflict,” Vijaykumar said.
“From the valuation and growth perspective, leading banks provide good buying opportunities. IT can stage a comeback,” he added.
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