World cheers no taper

Written by fe Bureau | Mumbai | Updated: Sep 20 2013, 09:02am hrs
The US Feds surprise decision to defer tapering its quantitative easing programme put the spark back in emerging markets, sent Indian benchmark indices to a near three-year high and helped lift the rupee to its strongest in 14 weeks.

Late on Wednesday, the US Federal Reserve said it would continue with its stimulus programme for now and take a call on tapering its monthly securities purchases of $85 billion only after getting more convincing evidence that the US economy was showing signs of lasting improvement.

US markets, which were widely expecting the Fed to cut its monthly purchases by at least $10 billion, hit an all-time high after the Fed decision.

Tracking the rally in global equities, the Sensex jumped 684.48 points or 3.43% to end at 20,646.64 the highest level since November 2010. The index is just 360 points away from hitting a new high. The Nifty gained 216.10 points or 3.66% to end at 6,115.55 a three-and-a-half month high. The 50-share gauge posted its biggest single-day gain 216 points since May 2009.

According to provisional data, FIIs net bought around $575 million of Indian equities on Thursday, taking their month-to-date tally to $1.75 billion.

The rupee gained more than 2% and closed at 61.77, making it Asias best-performing currency in Thursday trade. The rupee has rebounded by 10.5% from its all-time low of 68.85 hit in late August.

The benchmark 7.16% 2023 bond yield closed at 8.19%, 18 basis points lower than Wednesdays close of 8.37%.