Sensex up 275 points; bank stocks gain

Mumbai, June 18 (IANS) Bullish sentiments prevailed at the Indian equities markets on Thursday, a day after the US Federal Reserve decided to further postpone its rate hike, leading a barometer index to gain more than 275 points in the mid-afternoon trade session.

The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE) gained more than 275 points or 1.00 percent during the session under review.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also made gains during the mid-afternoon trade session. It was trading with gains of 73.65 points or 0.91 percent at 8,165.20 points.

The Sensex which opened at 26,916.99 points, was trading at 27,109.39 points (at 1.00 p.m.), up 276.73 points or 1.03 percent from the previous day’s close at 26,832.66 points.

The Sensex touched a high of 27,123.76 points and a low of 26,910.26 points in the intra-day trade so far.

According to Angel Broking, the Indian markets opened higher tracking the SGX Nifty and global cues.

“Indian markets rose for a fourth straight session on Wednesday, mirroring a mostly positive trend in global markets,” the firm said.

On Thursday, the US Federal Reserve decided not to raise interest rates in June, but signalled that the long-awaited rate hike could come in September as the economic activity picks up.

“The committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace,” the US central bank also known as the Fed said after a two-day policy meeting of the Federal Open Market Committee.

But the committee lowered its projections for economic growth significantly. In March, committee members projected 2015 growth would be between 2.3 percent and 2.7 percent.

“When the committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent,” it said.

The Fed had slashed interest rates to near 0 percent in December 2008 to help rejuvenate the battered economy.

The Fed has not actually raised rates in almost a decade and low interest rates and analysts saw little chance of the Fed raising rates at its June meeting.

The economy contracted in the first three months of 2015 while inflation and consumer spending remained tepid. Though it regained some momentum in spring, it was not enough to justify a June rate hike.

The US Fed’s stand that the rate hike might take place in the later part of the year might effect the Indian markets.

With higher interest rates in the US, the FPIs (Foreign Portfolio Investors) are expected to be led away from the emerging markets such as India.

During the intra-day trade on Thursday, healthy buying took place in the bank, oil and gas, healthcare, consumer durables, automobile and capital goods stocks.

However, realty scrip came under selling pressure.

The S&P BSE banking index zoomed by 216.83 points, followed by the oil and gas index which gained by 188.15 points, healthcare index augmented by 177.21 points, consumer durables increased by 166.67 points, automobile index rose by 155.70 points and capital goods index was up by 150.99 points.

The S&P BSE realty index slipped by 2.52 points.

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