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After witnessing losses for two days in a row, the equity markets reported a sharp rebound on Thursday as the US Federal Reserve kept the interest rates unchanged and sounded less hawkish.
While BSE Sensex advanced 489.57 points or 0.77 per cent to close at 64,080.90, the broader NSE Nifty50 index gained 144.10 points or 0.76 per cent to end at 19,133.25. The Nifty touched an intraday high of 19,175.25 and a low of 19,064.15.
Global markets
In Asian markets, Seoul, Tokyo and Hong Kong advanced, while Shanghai settled lower. European markets were trading in positive territory. The US markets ended with gains on Wednesday.
US Federal Reserve’s meeting
At the end of a two-day meeting, the US Federal Reserve kept the policy interest rates unchanged to “achieve maximum employment and rein in inflation.”
“The Board of Governors of the Federal Reserve System voted unanimously to maintain the interest rate paid on reserve balances at 5.4 percent, effective November 2, 2023,” the central bank said in a statement.
Addressing the post policy press conference, US Federal Reserve Chairman Jerome Powell acknowledged that “the full effects of our tightening have yet to be felt.”
“We are committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation sustainably down to 2 percent over time, and to keeping policy restrictive until we are confident that inflation is on a path to that objective,” he added.
Not out of the woods yet
Market analysts observed that it would be premature to adopt a bullish bias for the medium-term, despite the dovish stance taken by the US Fed.
“The current market upswing should be viewed as a temporary respite as the forthcoming release of crucial data such as US non-farm payrolls and Consumer Price Index (CPI) figures will be pivotal in determining a definitive trajectory,” Arvinder Singh Nanda, Senior Vice President, Master Capital Services, said.
According to Nanda, Nifty is likely to drift in the range of 19000 to 19250 with sideways to positive bias.
“A decisive breakthrough of upper range value may take such advance for 19500, while on the downside, a sustainable fall below the psychological mark 19000 may be in the range of 18800-18700,” he added.
Gainers and losers
Britannia (2.97 per cent), Hindalco (2.68 per cent), IndusInd Bank (2.10 per cent), Apollo Hospitals (1.95 per cent) and Eicher Motors (1.76 per cent) were the top gainers among the Nifty50 stocks, while Hero MotoCorp (1.03 per cent); Bajaj Auto (0.47 per cent); HDFC Life (0.17 per cent), ONGC (-0.19 per cent) and Adani Enterprises (0.15 per cent) were the major laggards.
The BSE Midcap index gained 1.2 per cent and the Smallcap index advanced 0.97 per cent.
Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,261.19 crore on Thursday, according to exchange data.
Sectoral indices
Notably, all the sectoral indices gained in the range of 0.69 per cent-2.55 per cent. BSE Realty was the major gainer (2.55 per cent) followed by BSE Telecommunication (2.42 per cent) and BSE Utilities (1.78 per cent).
Market Depth
On BSE, out of the 3,791 stocks that were traded on Thursday, 2,322 stocks advanced, while 1,328 declined and 141 stocks remained unchanged.
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