US Fed pushes domestic indices to record high

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Mumbai, Sept 22: The Bombay Stock Exchange (BSE) Sensex climbed up by 960.43 points or 6.16 per cent to 16,564.23 in the week ended Friday, September 21, after hiting an all time high of 16,616.84 that day, on the back of the US Federal Reserve's move to cut Fed interest rates.

Among the broader markets, the National Stock Exchange (NSE) S&P CNX Nifty rose 319.55 points or 7 per cent at 4,837.55 in the week, after hitting an all time high of 4,855.70 yesterday.

The BSE Mid Cap rose 302.92 or 4.39 per cent to 7,199.92, while the BSE Small Cap index rose 322.54 points or 3.76 per cent to 8,895.30 in the week.

''Though domestic bourses started the week on negative note, it just zoomed to records levels later amid a global rally triggered by the US Federal Reserve announcing a larger-than-expected 50 basis points cut in fed funds rate to 4.75 per cent from 5.25 per cent after trading hours on Tuesday. The move eased concerns about the housing slump that was driving the world's largest economy into recession. Sensex advanced in 4 out of 5 trading sessions in the week,'' market analysts pointed out.

The barometer index lost 99.37 points or 0.64 per cent at 15,504.43 on Monday. Though it had started the day on a firm note on buying interest in index pivotals, it lost ground in early afternoon trade with European markets which opened after Indian market, sliding in early trade.

Then the Sensitive Index advanced 164.69 points or 1.06 per cent at 15,669.12 on Tuesday, surging in the second half of the trading session on expectations of a 25 basis points fed rate cut. With this rise, Sensex came out of its two-day loosing streak.

The big day for the 30-scrip BSE Sensex was on Wednesday, when it just zoomed by a whopping 653.63 points or 4.17 per cent at 16,322.75. It was a record single day point rise in the Sensex. The market soared to record closing with high turnover. It opened with a bang and kept on advancing during the course of the trading session as buying continued for index pivotals. Short covering also propelled the market higher to some extent. A global rally was triggered after the US Federal Reserve announcing a larger-than-expected 50 basis points cut in fed funds rate to 4.75 per cent from 5.25 per cent, after trading hours on Tuesday, easing concerns about a housing slump driving the world's largest economy into recession.

It was up once again by a modest 25.20 points or 0.15 per cent at 16,347.95 on Thursday, as it had to consolidate after such a huge leap a day-before, market analysts explained.

On the last day of trading for the week, the Sensex surged 216.28 points or 1.32 per cent at 16,564.23, an all time closing high, led by heavy buying in index pivotals especially for Reliance group stocks. Both the niche indices BSE Sensex and S&P CNX Nifty struck all time highs. Information technology (IT) pivotals bounced back after initial slide.

This week's leaders included Reliance Industries (RIL), BHEL, SBI, ICICI Bank, ONGC, Maruti Suzuki India, Reliance Communication, Reliance Energy (REL), L&T, DLF, Unitech and Indiablls Real Estate.

However, information technology (IT) pivotals declined in the week on fresh selling as a steep interest rate cut by the US Federal Reserve on Tuesday, set the Rupee on fire and it hit a nine-year high above 40 per dollar on Thursday. Subsequently, Wipro, Satyam Computers, Infosys Technologies and TCS edged lower.

Sugar shares were star gainers during the week on frenzied buying after Union Agriculture Minister Sharad Pawar said the Government plans to give more fiscal incentives to sugar mills. Analysts also say that from now onwards sugar mills may be allowed to produce ethanol directly from cane juice, instead of molasses, to lower dependence on sugar prices.


UNI

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