Sensex Rebounds on Hopes Federal Reserve Will Retain Stimulus
Mumbai: The BSE Sensex rose on Wednesday, recovering from nearly 2-1/2-week lows hit in the previous session, as hopes the Federal Reserve would keep its stimulus measures boosted exporters such as Infosys Ltd and other blue chips.
Shares, along with their Asian counterparts, also benefited after China's central bank injected $81 billion into banks to stimulate the world's second-largest economy.
The US central bank meeting will end later in the day and any pledge to continue low rates could raise hopes of additional foreign flows into emerging markets such as India.
Foreign investors who have been key behind the benchmark indexes marking record highs last week have bought Indian shares worth of $14.26 billion in 2014, so far.
"Tone of Fed chief is under intense scrutiny. If it is subdued then expect a rebound across emerging markets including India," said Deven Choksey, managing director at K R Choksey Securities.
The benchmark BSE Sensex rose 0.52 per cent, or 138.78 points, to end at 26,631.29, rebounding from its lowest intraday level since August 26 hit on Tuesday.
The broader Nifty gained 0.54 per cent, or 42.60 points, to end at 7,975.50, marking its biggest single-day gain since September 8.
Exporters led the gains on hopes of being safe bets ahead of the Federal Reserve's policy outcome at 1800 GMT (11:30 p.m. in India).
Infosys rose 2.5 per cent, Tata Motors Ltd ended 1.4 per cent higher, while Dr Reddy's Laboratories Ltd gained 2.4 per cent.
Among other blue-chips, Reliance Industries Ltd rose 0.9 per cent, while ITC Ltd ended up 0.5 per cent.
Metal shares advanced after China's economic stimulus raised hopes of a boost in demand from the World's largest consumer.
Tata Steel Ltd gained 1.7 per cent, Hindalco Industries advanced 0.2 per cent and JSW Steel rose 2.8 per cent.
Yes Bank gained 1.9 per cent after domestic rating agency Icra upgraded the lender's debt ratings for six categories.
Eros International Media gained 2 per cent after rival Shemaroo Entertainment Pvt's IPO is seen pricing at higher multiples.
However, among stocks that fell, Future Retail Ltd lost 1 per cent on profit-taking after rising 8.1 per cent over the previous two sessions.
Copyright @ Thomson Reuters 2014
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