The US Federal Reserve’s decision to refrain from winding down its monetary stimulus programme proved to be a booster shot for Indian equity markets.

The Sensex crossed the 20,000 mark to close at 20,646.64, up by 3.43 per cent or 684.48 points. The Nifty crossed the 6,000 level to end 3.66 per cent higher at 6,115.55

“The Federal Reserve announcement of not tapering has come as a significant positive surprise for markets. For the time being it appeases concerns of volatility in global capital flows into India,” said Lalit Thakkar, Managing Director- Institution, Angel Broking.

“The positive impact on the rupee also should give headroom to the RBI to come up with further positives in the upcoming RBI monetary policy announcement, with some possibility of roll back in the marginal standing facility rates. That is likely to provide further wings to the current rally,” he added.

MSF is the rate at which banks can borrow overnight from RBI, when there is a considerable shortfall of liquidity. This was introduced in the monetary policy of RBI for the year 2011-2012.

Among sectoral indices, Bankex (up 6.78 per cent), Realty (up 5.34 per cent) and Capital Goods (up 4.75 per cent) led the charge on the BSE. The Information Technology Index, which was down by 0.2 per cent, was the only index to lose ground today.

On Nifty, Punjab National Bank, Bank of Baroda and Jaiprakash Associates were the chief gainers while HCL Technologies, Infosys and Coal India were the main losers.

On the BSE, market breadth was positive with 1,430 shares advancing and 997 shares declining even as 156 shares remained unchanged.

(This article was published on September 19, 2013)
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