The BSE Sensex rallied over 400 points on Friday following mixed global cues after the Federal Reserve decided to keep the key interest rates unchanged. (Photo: Reuters)
The BSE Sensex rallied over 400 points on Friday following mixed global cues after the Federal Reserve decided to keep the key interest rates unchanged.
At 10.47 am, Sensex was up 416.33 points at 26,380.30. Similarly, Nifty was up 128.70 points at 8,027.85 during the same time.
Below are the 5 reasons why Sensex rallied over 400 points today:
1. The BSE Sensex and NSE Nifty rallied on hopes that the Reserve Bank of India will have scope to cut its key lending rate later this month after the US Federal Reserve kept its interest rates unchanged. Traders had feared a rate hike by US Fed on Thursday would have sparked volatility in emerging markets and would have kept the RBI away from cutting the repo rate at its policy review on Sept 29.
2. Statement from government also boosted the market sentiments. Finance Minister Arun Jaitley on Friday said that inflation and deficit are under control and rupee has been more stable than other currencies. Economic Affairs Secretary Shaktikanta Das also said that US Fed decision to hold rates gives more room to emerging markets for policy adjustment.
3. Buying interest in banking stocks contributed to market rally. The BSE Bankex was trading 3.32 per cent at around 10.55 am. Private banks like HDFC Bank were trading 3.3 per cent up, ICICI Bank was up 3.6 per cent, Axis Bank 4.5% up and Yes Bank was up 1.5% after reports said that government may consider raising foreign ownership in private banks to 100 pct from 74 pct.
4. Strong opening of the Indian rupee also contributed to the stock market rally as the Indian currency strengthened by 32 paise to 66.14 against the US dollar in early trade after the American currency tumbled against major world currencies as the Federal Reserve decided again not to increase interest rates.
5. Asian shares rose modestly on relief the Federal Reserve held off on raising interest rates but gains were capped by renewed concerns about the health of the global economy, in particular China.
With agency inputs
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