Sensex gains most in 7 weeks as Fed signals slow rise in interest rates

MUMBAI: Stock markets bounced back on Thursday, with both the Sensex and Nifty rising close to 1.5%, their biggest single-day percentage gain in almost seven weeks, on expectation that while the US Federal Reserve was likely to raise interest rates in December, it would be cautious on further tightening.

The BSE Sensex surged 359.40 points, or 1.4%, to close at 25,841.92, while the broader NSE Nifty gained 1.4%, or 110.95 points, to 7,842.75.

“Sentiment was boosted mainly due to the minutes of the US Fed meet, in which they said that the pace of rate hike will be slow and that it may start as early as next month ,” said Jay ant Manglik, president, retail distribution at Religare Securities.

Continued reform-related announcements by the government, which included a 3% interest subsidy scheme for exporters late on Wednesday, also lifted market mood, dealers said.

Of the 30 Sensex stocks, 26 ended in the black, with Bajaj Auto gaining 3.3%. Others, including Vedanta, HDFC, Infosys, Maruti Suzuki, Gail, RIL, ICICI Bank and Hindalco, rose more than 2%.

Markets had fallen 1% on Wednesday.

Markets are likely to remain volatile for some more time as foreign institutional investors continue to pull out from emerging markets, analysts said. All eyes will also be on whether the government manages to get key bills, including GST, cleared in the upcoming winter session of Parliament.

According to data from the Central Depository Services India Ltd (CDSL), foreign portfolio investors sold shares worth more than ` 1,000 crore in the last two trading sessions.

STOCK MARKET HAD FALLEN 1% ON WEDNESDAY.