Sensex jumps 385 pts as US taper cloud recedes

Traders cheer on hopes that US shutdown will prompt Fed to continue policy of pumping cheap money, boosting Indian economy

MUMBAI: The benchmark Sensex on Thursday soared 385 points, or 2.0%, to a one-week high of 19,902 as the partial US government shutdown eased fears among investors about the Federal Reserve tapering its $85-billion monetary stimulus programme.

A delay in tapering the Fed’s monetary stimulus would ease concerns about investors pulling out funds from assets in emerging markets including India.

The broader 50-share Nifty rose 130 points, or 2.2%, to end at 5,910.

The rupee, which logged its biggest gain in two weeks, rising 73 paise, or 1.2%, to 61.73 against the US dollar, boosted sentiments.

Shares in software exporters such as TCS and Infosys gained after brokers said the sector was facing rising demand from the US and Europe. This aided the market momentum.

“Investors seem to have used the logic that if the lockdown continues then the US Fed will have to postpone its tapering of bond-buying programme (Q3) till the next year. This will be good for emerging markets,” said S Udasi, senior vice-president and research head, IDBI Capital Markets.

Of the 30 Sensex stocks, 27 advanced, led by Sesa Goa (up 7.2%), Bajaj Auto (up 5.1%), Hindalco (up 4.3%), Tata Power (up 4.0%) and TCS (4.0%).

Among the sectoral indices, the metal index rose 3.9%, followed by bankex (up 3.4%), capital goods (up 2.8%), oil & gas (up 2.5%) and IT (up 2.4%).

The market breadth remained positive as 1,472 stocks ended with gains while 943 closed lower and 145 ruled steady.