JOIN USSensex up 382 pts as Fed reiterates stimulus need
Key benchmark indices on Thursday surged as world stocks rose after Federal Reserve Chairman Ben S Bernanke the previous day said that a highly accommodative monetary policy is needed for the US economy in the foreseeable future.
The signal that the US Federal Reserve will in all probability maintain an accommodative policy stance sent world stocks surging as the Fed's bond-buying program and quantitative easing by other central banks worldwide flooded global markets with liquidity and helped support an array of assets, including equities in recent years.
The BSE Sensex rallied 381.94 points or 1.98 per cent to settle at 19,676.06 points, its highest closing level since May 31, 2013. Investor wealth soared by Rs 1 lakh crore triggered by heavy buying on the stock markets. The 50-unit CNX Nifty at NSE rose 118.40 points or 2.04 per cent to 5,935.10, its highest closing level from June 3, 2013.
Domestic equities too rallied on the back of US Federal Chief's emphasising a highly accommodative monetary policy on the one hand, while on the other hand market sentiment in D-Street revved up over IT major Infosys stock rose ahead of its Q1 2013 results on Friday. At the same time, gains in the rupee also buoyed investor sentiment.
The market breadth, indicating the overall health of the market, was positive as all sectoral indices on BSE were in the green except the 'Consumer Durables Index'.
Index heavyweights ITC and Reliance Industries gained, while mining and metal stocks rose after global commodity prices rallied overnight. Bank stocks surged across the board, while capital goods stocks also edged higher but auto stocks were mixed.
Company-wise, Infosys rose ahead of its Q1 June 2013 results on July 12, while in the pharma segment, Dr Reddy's Lab, Sun Pharma and Lupin hit record highs.
Kotak Securities Vice President Sanjeev Zarbade said: “Indian markets rallied strongly propelled by comments from Fed Chairman Bernanke’s remarks that the US economy continues to need highly accommodative monetary policy. Consequently, the Asian and European markets have performed strongly.”
Overseas markets, European stocks mirrored gains in Asian market after the US Federal Reserve Chairman Ben S. Bernanke said the world's biggest economy will continue to need stimulus.
Key benchmark indices in UK, France and Germany were up 0.61 to 1.08 per cent.