The Sensex and the Nifty surged nearly 0.8 per cent on continued buying by participants amid good quarterly earnings and a firm trend overseas as investors await the outcome of the US Federal Reserve policy meeting.

Besides, covering-up of short positions by speculators ahead of monthly expiry in the derivatives segment, supported the rally.

World stocks rose on Wednesday, lifted by strong corporate earnings and investor optimism that the US Federal Reserve won’t raise interest rates for some time, even as it is expected to officially wind down its bond-buying stimulus programme.

The 30-share BSE index Sensex surged 217.35 points to end at 27,098.17 and the 50-share NSE index jumped 62.85 points to close at 8,090.45.

Sectoral indices

Barring healthcare and banking, all other BSE sectoral indices ended significantly in the green. Among them, realty index gained the most by 2.97 per cent, followed by metal 2.63 per cent, auto 1.79 per cent and IT 1.47 per cent. On the other hand, healthcare index was down 0.29 per cent and banking 0.23 per cent.

Gainers, losers

Hindalco, Tata Steel, Tata Motors, Infosys and SSLT were the top five gainers among 30-share Sensex constituents, while the top five losers were NTPC, Sun Pharma, Dr Reddy's, Bharti Airtel and SBIN.

Sustained FII buying

Brokers said besides sustained buying by investors on hopes of further reforms and encouraging earnings by some more blue-chip companies, covering-up of short positions by speculators in view of tomorrow’s monthly expiry in the derivatives segment, influenced the trading sentiment.

In addition, a firm trend in global markets following overnight gains in the US, accelerated buying activity on the domestic bourses here, they said.

European shares

Europe’s main indices followed the overnight lead from Wall Street and Asia, although the third-quarter earnings reports out of Europe were not quite as solid as those from the United States.

The dollar was under light selling pressure and major government bond yields were marginally lower, as currency and fixed income markets anticipated a soothing message from the Fed when it ends its two-day policy meeting later in the day.

Around Europe, the UK’s FTSE 100 index was up 0.7 per cent, Germany’s DAX index up 0.7 per cent, and France’s CAC 40 up 0.1 per cent.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.1 per cent and Japan’s Nikkei share average climbed 1.5 per cent.

The Fed is widely expected to announce that it will end its two-year-old stimulus programme known as quantitative easing three, as the US economy continues to gather momentum. The Fed started buying bonds as far back as late 2008.

Still, Fed officials have also stressed that they are in no hurry to take policy tightening a step further by raising rates from near zero levels due to subdued inflation and the poor quality of a recovery in labour markets.

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