Sensex cheers Fed move, up 684 pts; focus shifts to RBI

3:50 pm:It was a blockbuster rally on the Dalal Street as the bulls partied on Federal Reserve Chairman Ben Bernanke's decision. The Sensex closed up 684.48 points or 3.43 percent at 20646.64, and the Nifty ended at 6115.55, up 216.10 points or 3.66 percent. About 1412 shares have advanced, 990 shares declined, and 163 shares are unchanged.

3:40 pm Movers and gainers:
Banking stocks were star of the day with SBI gaining 8 percent and YES Bank surged 23 percent. Tata Steel , ICICI Bank , Tata Power and L&T are top gainers in the Sensex.

3:30 pm Macro economy outlook:
While the RBI governor Raghuram Rajan may not be able to go in for big bang rate cuts or easing on the liquidity side, Ananth Narayan of Standard Chartered Bank expects him to ease some of the extreme steps that were taken during the course of July 15 and July 22.

He hopes Rajan will bring down marginal standing facility (MSF) rate, short-end rates, some easing on the daily CRR for banks, among others. With global and the domestic market scenarios changing in favour of the Indian markets, the rupee is likely to benefit.

But the current rally in rupee won't last long, he says. According to him, prudence demands that after a sharp pullback from 68.80/USD down to 61/USD handle right now, it is important that people who have foreign currency liabilities look at buying some insurance.

Ben Bernanke's not-to-taper move set the market on fire. The Sensex is up 663.39 points or 3.32 percent at 20625.55, and the Nifty up 212.65 points or 3.60 percent at 6112.10. About 1408 shares have advanced, 991 shares declined, and 166 shares are unchanged.

In the global front, Federal Reserve decided to hold bond purchases steady at USD 85 bn dollar per month. Ben Bernanke says the government will continue buying bonds till labour market outlook improves. Fed also keeps the refinance rate unchanged at 0.0-0.25 percent.

Shares in state-owned oil retailers gained as a rally in the rupee against the dollar was seen easing concerns about higher cost of crude oil imports and dollar debt, dealers say, reported Reuters. HPCL gained 4 percent and BPCL rallied 8 percent while IOC rose 3 percent.

The rupee surged as much as 2.8 percent on Thursday, hitting its highest in a month, as the US Federal Reserve's decision not to dial back its easy money policy is expected to provide a reprieve to the local central bank in its policy making. Bank Nifty is also at its highest level since July 23, which jumped over 3400 points since August 28 low. Banking stocks gained in the range of 3-23 percent.

02:55pm Polaris Buzz Polaris shares gained more than 2 percent on top of a 1.7 percent rally in previous session as a media report yesterday suggest that the company was in talks with Japan's NEC to sell services division.

Sources told CNBC-TV18 today that bidders want the company to consider sale of entire company. NEC and NTT seek majority stake in the company, say sources. Both are currently in exploratory talks with company.

It is learnt that the company is keen to keep its product business while bidders like NEC & NTT are eyeing its product business. Sources say Polaris is unwilling to reduce valuation for its services business. It is likely to have sought USD 330 million for the same. Meanwhile, the Sensex is up 746.25 points or 3.74 percent at 20708.41, and the Nifty is up 233.85 points or 3.96 percent at 6133.30.

02:50pm Oil Retailers Rally Shares in state-owned oil retailers gained as a rally in the rupee against the dollar was seen easing concerns about higher cost of crude oil imports and dollar debt, dealers say, reported Reuters. HPCL gained 4 percent and BPCL rallied 8 percent while IOC rose 3 percent.

The rupee surged as much as 2.8 percent on Thursday, hitting its highest in a month, as the US Federal Reserve's decision not to dial back its easy money policy is expected to provide a reprieve to the local central bank in its policy making.

02:45pm F&O update Stocks futures added 5 crore shares in open interest and high beta stocks saw huge build-up. Nifty 6100 Put added 30 lakh shares in open interest and 6000 Put added 26 lakh shares in open interest. Nifty 6000 call shed 14 lakh shares in open interest while 6300 call added 7 shares in open interest and its premium jumped 1.5 times to 24.

02:35pm Market Update The Nifty sees biggest 1-day gain since May 2009 in absolute terms while the Sensex touched its highest level since November 2010.

The 50-share NSE benchmark gained 1,000 points from its August 28 lows and rallied 1,000 points in last 16 trading sessions. About 30 Nifty stocks rallied over 20 percent since August 28 low. Bank Nifty is also at its highest level since July 23, which jumped over 3400 points since August 28 low. Banking stocks gained in the range of 3-23 percent.

02:25pm Stock in News Ashoka Buildcon gained 3 percent as its joint venture has signed concession agreement with Tamil Naud government for road project. Joint Venture will develop Chennai ring road on annuity basis. Suzlon Energy shares surged 4 percent after the company sold 75 percent stake in its China arm for USD 28 million to Poly LongMa Energy. The move is a part of the company's asset monetisation stratgey in order to pare its Rs 13,700 crore rupee debt.

02:15pm Bulls retained their hold on the Dalal Street in afternoon trade with the equity benchmarks surging more than 3.5 percent, supported largely by rate sensitives after Federal Reserve has kept its bond buying programme unchanged at a rate of USD 85 billion per month. The Sensex is up 715.26 points or 3.58 percent at 20677.42, and the Nifty is up 228.05 points or 3.87 percent at 6127.50. About 1331 shares have advanced while 887 shares declined on the Bombay Stock Exchange.

One needs to be cautiously optimistic on emerging market says Herald Van Der Linde, Head of Equity Strategy, Asia-Pacific, HSBC because the issues concerning current account deficit (CAD), reforms etc have not yet gone away. So he sees no case for changing their rating. Recently, HSBC had downgraded India to an underweight.

Moreover, he expects a correction for Indian market at some point of time. Meanwhile, the rupee gained 161 paise to 61.76 against the US dollar on sustained dollar selling by FIIs. As surprising as the FOMC announcement was yesterday, this brings great news for emerging markets, says Nirmal Jain, Chairman, IIFL. Easy money will continue to come into emerging markets which will lead to a rally in currencies, equities and bonds, he says.

2:00 pm Market check:
The Sensex is up 692.02 points or 3.47 percent at 20654.18, and the Nifty up 219.70 points or 3.72 percent at 6119.15.  About 1329 shares have advanced, 884 shares declined, and 137 shares are unchanged. SBI is up 8 percent on the BSE.

1:55 pm Gold update:
Spot gold traded near a one-week high on Thursday after the US Federal Reserve surprised markets by postponing a wind-down of its commodities-friendly monetary stimulus and the dollar tumbled to seven-month lows, reports Reuters. US gold futures jumped as much as 4.6 percent on the decision, while silver futures gained 7 percent, tracking spot prices' gains from the previous session. The absence of key buyer China, which is closed for the Mid-Autumn Festival holiday, kept gains in check.

1:50 pm Market outlook:
The market is likely to make fresh highs of 6200-6300 by the year-end, but sustenance of the rally may be a concern, says Bharat Iyer, head of India equity research, JP Morgan. The market has rallied a good 2.5 percent after Fed refrained from tapering its USD 85 billion bond buying program, "but it is inevitable in the next 3-6 months," says Iyer. Among specific stocks, Iyer is sure of FMCG disappointing. He says that the economic slowdown will impact sales leading to dismal earnings and adds that the FMCG stocks also have expensive valuations. Instead, Iyer, advises investors to look at beaten down financials and rate sensitives.

1:40 pm Update:
Etihad Airways is expanding operations in India with more flights and wide-bodied jets, building on its deal with Jet Airways as it eyes growth in one of the fastest growing markets, reports Reuters. The Abu Dhabi airline, which is buying a 24 per cent stake in the Indian operator, announced a threefold increase in seats on the prime Abu Dhabi to Mumbai and New Delhi routes from November. Etihad also intends to codeshare on a wide range of flights operated within India by Jet Airways.

1:35 pm Buzzer:
Shares of State Bank of India jumped around 7 percent intraday on Thursday. The bank has hiked base rates by 10 basis points to 9.8 percent, ahead of the RBI monetary policy review on September 20. The country's largest lender has also revised prime lending rate by 10 basis points from 14.5 percent to 14.44 percent per annum.

1:30 pm Market outlook:
Sanjay Dutt of Quantum Securities sees the market soaring to new high in the immediate short-term, but says breaching 6100-6120 range would be difficult for Nifty. On the downside, 5600-5800 is the concrete base for the market now. Those looking to play the market should focus on sectors like metal, chemical and textile, he told CNBC-TV18 in an interview.

Dutt is also bullish on export-oriented sectors and expects them to benefit in short-term. "These sectors will benefit over the next few months once liquidity and credit flows improve and demand starts to pick up in the economy. We have seen the worst in the economy," he elaborated. He does not see India being downgraded. He further added that one can also look for good opportunities in public sector banks.

Ben Bernanke's decision to stick to stimulus keeps investors busy on Dalal Street as they continue to buy in afternoon trade. After a spectacular rally, the Sensex is up 603.20 points or 3.02 percent at 20565.36, and the Nifty up 192.65 points or 3.27 percent at 6092.10. About 1241 shares have advanced, 870 shares declined, and 141 shares are unchanged.

Banks are rallying in the run up to the hopes of some rate easing by the RBI tomorrow.  SBI, ICICI Bank , Tata Steel , Maruti Suzuki and ONGC are top gainers in the Sensex. Top losers in the Sensex is Wipro . In the global market front, the Federal Reserve decided to hold bond purchases steady at USD 85 bn dollar per month. Ben Bernanke says the government will continue buying bonds till labour market outlook improves. Fed also keeps the refinance rate unchanged at 0.0-0.25 percent.

12:59pm Market Update The market is trading near its day's high on broadbased buying. The Sensex is up 598.26 points or 3 percent at 20560.42, and the Nifty is up 193.75 points or 3.28 percent at 6093.20. Country's largest private sector lenders ICICI Bank , HDFC Bank and Axis Bank rallied 4-7 percent while PSU lenders like Bank of Baroda and PNB surged 9-10 percent. Among FMCG stocks, ITC and Hindustan Unilever gained 2.7 percent and 4.7 percent, respectively.

12:50pm Buzzers State Bank of India hiked its base rates by 10 basis points to 9.8 percent prompted by huge spike in advances in the past two months. The move is aimed at shoring up deposits. The stock is up 8 percent. Rupee appreciation boosted companies with high forex debt like Bharti Airtel and Tata Steel . Both rallied 4-6 percent. Bharti's forex debt stands at 70 percent of its total debt while Tata Steel's stands at 60 percent.

12:40pm Europe Update European markets like FTSE, CAC and DAX gained more than 1 percent in early trade after the Federal Reserve retained its bond buying at the rate of USD 85 billion per month. Economists were expecting tapering of bond buying by USD 5-10 billion. The Fed statement cited insufficient evidence of improvement in economic data to warrant a reduction in monetary stimulus. The Fed also downgraded its outlook for the economy.

Meanwhile, Indian equities maintained early gains, supported by financials, FMCG, auto, capital goods and oil & gas stocks. The Sensex is up 569.71 points or 2.85 percent at 20531.87, and the Nifty is up 186.55 points or 3.16 percent at 6086, but the gap between advance & decline narrowed from 3 times to 1.47 times now.

12:30pm Rupee Update The rupee opened 2.5 percent higher today and retained most of its gains on sustained dollar selling by FIIs. Importers are buying dollars. The currency surged 161 paise to 61.76 against the US dollar Bonds are also higher on expectations of more liquidity in the system and hopes of some easing by the RBI tomorrow.

12:20pm Global Update Asian markets rose sharply with Southeast Asian currencies surging against the dollar as investors cheer the Fed's surprise move to leave its stimulus measures intact. Hang Seng, Nikkei and Straits Times gained around 1.8 percent. US stocks on Wednesday had rallied to new all-time highs on this surprise move by the Fed. The us treasury softened to 2.65 percent and the dollar index sank to 7- week lows.

12:10pm After the Federal Reserve euphoria that pushed the Sensex more than 600 points higher intraday, now the focus is shifted to RBI monetary policy tomorrow. The Sensex is up 542.84 points or 2.72 percent at 20505 and the Nifty is up 176.40 points or 2.99 percent at 6075.85. New RBI governor Raghuram Rajan will announce its first monetary policy on Friday. Experts see no rate cuts from the RBI, but the guidance will be the key. Rajan is expected to leave key policy rates unchanged , and continue emergency cash tightening measures initiated in-mid July to stabilise the rupee, and check racing inflation, according to Reuters poll.

Wipro and NMDC are the major losers in equity benchmarks' portfolio, falling around 1.5 percent. NMDC continued its downward journey from previous session after Naxals torched conveyor belt in NMDC's Chhattisgarh plant. State-run iron orn producer said around 150 meters of conveyor belt burnt in Naxal attack. "Belt restoration work has already been taken up and we expect belt restoration work to complete within three days," the company said. (Posted by Sunil Shankar Matkar)

11:55 am Update:
Telenor's Indian unit has achieved breakeven in two more telecommunication zones it operates in, the unit's chief executive Yogesh Malik said, reports Reuters. Uttar Pradesh (west) and Bihar zones were the latest to achieve EBITDA (earnings before interest, tax, depreciation and amortization) breakeven, Malik said on a conference call.

11:50 am FII view on EMs:
With the US Federal Reserve lowering economic growth forecast the focus will now shift to emerging markets again and open opportunities for India, Sunil Garg, managing director of JPMorgan Securities said. He advises investors to stay long on India.

He feels majority of the FOMC outcome has already been factored in the Indian market. Equities, currencies and bonds will rally in the short-term, he told CNBC-TV18. Though in the long run, focus will be back on core issues plaguing the country, he warned. Meanwhile, he sees the rupee going below 60 per USD in the near-term. According to him, the RBI may not unwind its tightening measures on September 20 policy meet.

He sees selective buying in beaten stocks, though IT stocks may lose steam in the short-term.

11:40 am Gainers and losers:
SBI , ICICI Bank , Maruti Suzuki, Tata Steel , M&M are top gainers in the Sensex. on the losing side is Wipro . 11:30 am Buzzer: Suzlon Energy shares rallied more than 6 percent in early trade Thursday after the country's largest wind turbine maker divested 75 percent stake in its China subsidary. The turbine maker sold the stake in its subsidiary Suzlon Energy Tianjin for USD 28 million to China's Poly LongMa Energy (Dalian). However, the company will continue to hold its 25 percent stake in its China arm.

11:20 am FII view on Fed:
The fact that the money train will continue for a while means the risk of a hard-landing or a balance of payments crisis has been greatly reduced, if not averted. But, the Fed only postponed its tapering and even the BoJ will not print money forever. To avoid another rough summer, policy-makers in Asia will need to use this brief window to implement structural reforms to put Asian growth on a more sustainable path. That would make for a true bull market, says HSBC.

11:15 am Udayan speaks:
CNBC-TV18's Udayan Mukherjee feels in the current scenario the market does not deserve to be trading at an all-time high, as fundamentally nothing has changed. He expects the market to rally some more. "This is one of the dangerously thrilling kind of phases in the market. Not a lot is going for it fundamentally, but the most important near-term trigger which is liquidity has become much better and therefore you are seeing the massive reactions play out in both stocks and equities across emerging markets," he said.

Fueled by Fed's decision to continue buying bonds at the current rate of USD 85 billion a month for now, the market manages to maintain its uptrend. The Sensex is up 512.76 points or 2.57 percent at 20474.92, and the Nifty gains 166.75 points or 2.83 percent at 6066.20. About 1090 shares have advanced, 570 shares declined, and 103 shares are unchanged. Asian markets rise sharply with Southeast Asian currencies surging against the dollar as investors cheer the Fed's surprise move to leave its stimulus measures intact.

The US treasury softened to 2.65 percent and the dollar index sank to 7-week lows. Emerging market currencies rallied against the dollar. The real appreciated 3 percent and rand 2.5 percent overnight. Indonesia rupiah gained as much as 2.4 percent and the baht rose as much as 2.1 percent. Gold rallied to a one week high with gold futures jumping nearly 5 percent post the FOMC outcome. Brent crude edged above USD 110 per barrel. Back home, the rupee opens at a 5-week high as emerging market currencies rally. Bonds trade at the best levels in a month. (Posted by Nasrin Sultana)

10:59am Expert talks Indian equity market witnessed a massive rally today as US Federal Reserve chairman Ben Bernanke decided not to taper quantitative easing for now . Despite this huge upmove seen in the market, Prasad cautions that India's macros continue to be challenging. The current market rally will not sustain over 5 percent, predicts Sanjeev Prasad of Kotak Institutional Equities.

10:50am Laggards Wipro and Dr Reddys Labs were only losers in the Sensex, falling 1 percent and 0.2 percent, respectively. NMDC is the only weak stock in the Nifty 50, continuing its downward journey from previous session after Naxals torched conveyor belt in NMDC's Chhattisgarh plant. State-run iron orn producer said around 150 meters of conveyor belt burnt in Naxal attack. "Belt restoration work has already been taken up and we expect belt restoration work to complete within three days," the company said.

10:40am Rupee appreciation! The domestic currency gained 142 paise to 61.96 against the US dollar in morning trade today. It rallied around 700 paise in two weeks from its record low of 68.80 per dollar touched on August 28. Ray Farris, director, Credit Suisse expects the rupee to appreciate as  US Fed chaiman Ben Bernanke has witheld QE tapering for now . Speaking to CNBC-TV18, Farris said that the rupee is likely to trade in the range of 58-62 against the dollar and added that the central bank, the Reserve Bank of India , will be reluctant to allow the currency to appreciate too much.

10:30am Top Gainers ICICI Bank is the top gainer in the Sensex, rising more than 8 percent followed by State Bank of India, Bharti Airtel , Maruti Suzuki, Tata Steel , HDFC Bank and M&M with 4-6 percent gains. Among largecaps in the Nifty, Axis Bank , PNB , DLF and Jaiprakash Associates surged 7 percent each.

10:20am Rupee Impact Companies with high forex debt like Bharti Airtel and Tata Steel surged between 4-5 percent on the back of the rupee appreciation. Bharti's forex debt is 70 percent of its total debt while Tata Steel's forex debt is 60 percent of its total debt. Suzlon Energy is up 4 percent after the turbine maker sold its 75 percent in China arm for USD 28 million to Poly LongMa Energy. This divestment is a part of suzlon's strategy to monetise assets as it battles with huge debt.

10:10am Bank Nifty in bull grip Bank Nifty trades at its highest level in nearly two months, which rallied 28 percent in the past 11 trading sessions with ICICI Bank rallying 35 percent, Axis Bank 48 percent and YES Bank gaining 65 percent. It is up 6.84 percent to 11162.60. SBI gained 6 percent. The bank has hiked base rates by 10 bps to 9.8 percent. This is on account of the bank having seen a huge spike in advances in the past 2 months versus deposits; hence this measure will shore up deposits.

10:00am The market continued its joy ride with the equity benchmarks rising 3 percent after the Federal Reserve said it would continue its USD 85 billion monthly bond buying. The Sensex is up 574.13 points at 20536.29, and the Nifty is up 187.50 points at 6086.95. More than three shares advanced for every share declining on the National Stock Exchange.

Nicholas Ferres, Eastspring Investments is not surprised with Fed's dovish outlook. In an interview to CNBC-TV18, he said that Fed was not only worried about the labour market, but also about rising bond yields and the strength of US dollar. Meanwhile, Jonathan Barratt, Barrattsbulletin.

Com is of the view that continuing the stimulus would put pressure on the green back and by default lot of commodities would trade higher. Meanwhile, the rupee is at a 5-week high against the dollar, hitting a level of 61.65 to the dollar in early trade today as against previous close of 63.38. The 10-year bond yield is at 8.16 percent as against 8.37 percent level in previous session.

10:00 am Market opinion:
Ambareesh Baliga, Edelweiss Financial Services feels that it is a great opportunity for those who had missed selling out earlier and got stuck. "The Fed has given them the opportunity to book out at those higher levels because I do not know as to how long the market will hold on at 6,100-6,150 levels," he said in an interview to CNBC-TV18.

9:50 am Banking stocks on fire: Bank Nifty is up around 6 percent from the previous close. YES Bank is leading the pack with a gain of 16 percent followed by IndusInd Bank (up 10 percent), ICICI Bank (up 8 percent), Axis Bank (up 8 percent) and SBI (up 6 percent) among the lead gainers.

9:45 am FII View:
Jonathan Garner of Morgan Stanley says that India will remain exposed to the trend of the US dollar and real interest rates as long as India's current account deficit remains higher than a more sustainable level of 2.5 percent of GDP and CPI inflation remains higher than 7 percent. In the near-term, the rupee and interest rate environment in India is likely to remain highly dependent on Fed's monetary policy action.

9:40 am Buzzer:
NMDC falls further 3 percent on the BSE on concerns that naxals set on fire a conveyor belt of the state-run company in Chhattisgarh's Dantewada district on September 18. However, the management has said that the restoration work has already started and it will be over in three days.

9:35 am Market outlook:
Rajeev Malik, CLSA said, "Indian financial assets will react positively to the FOMC's unexpected decision of no taper. The increased global risk-on will be unequivocally positive for rupee, equities and bonds. However, beyond the near-term reaction, the headwinds for the rupee from the anticipated global liquidity tightening in 2014 remain unchanged."

"The RBI will still signal a hawkish tone and may partly reverse minimum daily CRR balance requirement for banks," he added.

9:26 am Market check:
The Sensex is up 481.34 points or 2.41 percent at 20443.50, and the Nifty up 155.30 points or 2.63 percent at 6054.75. About 655 shares have advanced, 139 shares declined, and 31 shares are unchanged.

9:20 am Winner and losers:
Banking stocks have become investors favourite with the Bank Nifty up 6 percent from the previous close. ICICI Bank, Maruti Suzuki, Bharti Airtel , SBI and HDFC Bank are top gainers in the Sensex. Technology stocks are under selling pressure on strong rupee. On the losing side are Wipro , TCS and Infosys .

The market is riding high on the US Federal Reserve's decision to continue buying bonds at the current rate of USD 85 billion a month for now. Strategists and traders were expecting the central bank to announce a USD 10- USD 15 billion reduction to its asset purchase programme. The Fed statement cited insufficient evidence of improvement in economic data to warrant a reduction in monetary stimulus. The Fed also downgraded its outlook for the economy.

The Sensex opens up 385.14 points or 1.93 percent at 20347.30, and the Nifty up 144.70 points or 2.45 percent at 6044.15. About 319 shares have advanced, 28 shares declined, and 13 shares are unchanged. Indian rupee appreciated by 139 paise to 61.69 per dollar in early trade Thursday as against Wednesday's closing of 63.38 after the US Federal Reserve said it would continue buying bonds at the current rate of USD 85 billion a month for now.

Ashutosh Raina of HDFC Bank said, "All currencies, particularly emerging market currencies are already rallying against the dollar. On the back of Fed's announcements, we could expect RBI to announce mild positives on rate control measures. Rupee may touch 60/USD in the medium term as well. The range for the day is seen between 61-63/USD". The dollar index slid 1.2 percent overnight, its biggest one-day slide in more than 2 months to levels of 80 and the euro dollar has run away to 1.35. On the global market front, US markets saw record highs and the Dow rallied 150 points to shutting shop at record highs.

Emerging markets are leading the gains in Asian markets that are enjoying a risk-on rally post Bernanke's move on tapering the QE3. Japan's Nikkei hit a 2-month high, while Australian equities rose to a new 5-year high. Volumes, however, were light due to Shanghai and South Korean markets being shut for public holidays. Crude prices gained with Nymex spiking to USD 108.5 per barrel levels. Gold rallied 3 percent to 1360 per ounce levels - jumping the most since 2009. The dollar though languishes near 7-month lows and the euro trades at an unbelievable 1.35 against the dollar.