Sensex surges 550 pts intra-day as market now tracks US Fed
27 Aug 2015
Global markets that nosedived trailing China's falling growth on Monday surged on Thursday tracking developments in the United States. Markets gained on the US Fed's comments that it may not push for a rate hike under present circumstances.
The Bombay Stock Exchange (BSE) Sensex and Nifty surged on Thursday, tracking gains in global markets. The Sensex rose over 550 points to hit an intra-day high of 26,273 while Nifty was near 7,950 as global markets pushed higher.
At 4:00 pm the BSE Sensex was up 516.53 points (or 2.01 per cent) at 26,231.19 points. The market also gained from a US Fed remark that it was in no hurry to hike rate.
Global markets rebounded today after a top official of Federal Reserve yesterday said that a September rate hike from the US agency looks "less compelling" in the wake of global growth concerns.
The global sentiment also helped China stock markets record their biggest gain today in two months.
Fed assurance also helped lift currencies, including the Indian rupee.
A rate hike from the US could have triggered outflows from emerging markets, leading to more turmoil in global financial markets.
Also, Japan's central bank governor Haruhiko Kuroda said market players had become "too pessimistic" about China, and he expected its growth would likely remain at 6-7 per cent this year and next.
Markets around the world plunged earlier in the week as a slump in Shanghai shares fueled worries over China's economic health, but a Wall Street surge and Fed comments that it may delay a rate hike soothed nerves across markets.
The Fed official's comment led to a big rally on the Wall Street overnight. The Dow Jones industrial average surged 619.07 points (or 3.95 per cent) higher at 16,285.51 – its biggest gain since 2008.
Major European markets also gained nearly 2.5 per cent in early trade.
In China, markets snapped a six-day fall. The blue-chip CSI300 index jumped six per cent, while the Shanghai Composite Index gained 5.4 per cent - their biggest one-day gains (in percentage terms) in nearly two months. China markets had slumped over 20 per cent in the previous six sessions.
Dalal Street in now looking for a possible rate cut by the Reserve Bank of India (RBI). RBI is scheduled to review is monetary policy at its nest review meeting on 29 September.
The Indian market, which is under the firm grip of foreign institutional investors (FIIs), is unlikely to gain from any RBI rate cut.
Foreign institutional investors hold nearly 25 per cent of BSE 200 stocks.
