Stock markets gave participants a pleasant surprise on Thursday, swinging back after a dismal week to gain over 1.5 per cent.
Sentiments were propped up by analysts’ reading into the Federal Reserve committee’s meeting minutes, which seemed to suggest that the interest rate hike in the US would start in December but would be gradual thereafter. This implies that foreign investors will continue to be interested in emerging market equities for a while more.
On the domestic front, the government’s return to the reform fast track late on Wednesday — by green-lighting road and railway projects, subsidies for exporters and cane farmers and a 10 per cent stake sale in Coal India — cheered traders.
The Sensex gained about 360 points to close at 25,841.92 while the Nifty50 moved up by 111 points to 7,842.75.
Foreign portfolio investors sold net equity of ₹343.18 crore while domestic institutions bought net equity worth ₹233.82 crore. Retail investors on the BSE sold net equity of ₹31.29 crore. Barring pharmaceuticals, all sectoral indices on the NSE traded in the green.
However, Thursday’s performance is only a relief rally, says Alex Mathews, Head – Research, Geojit BNP Paribas Financial Services, as the markets had been oversold over the past week.