Chinese investment pledge, US Fed fuel rally

Written by ENS Economic Bureau | Mumbai | Updated: Sep 19 2014, 13:50pm hrs
BSE SensexChina?s offer to make mega investments in India and the US decision to hold interest rates excited the domestic stock market. Reuters
Chinas offer to make mega investments in India and the US decision to hold interest rates excited the domestic stock market with the benchmark Sensex rallying the most in nearly four months.

Riding on expectations of more foreign inflows and higher economic growth, the BSE Sensex which resumed lower quickly rebounded in line with positive Asian trends to cross the 27,000-mark and hit a high of 27,132.20, before settling at 27,112.21, a rise of 480.92 points or 1.81 per cent.

Previously, it had zoomed 556.77 points or 2.42 per cent on May 12. Similarly, the 50-share NSE Nifty regained the 8,100 level and touched the days high of 8,120.85 before settling 139.25 points higher at 8,114.75. Devang Mehta, senior VP and head equity advisory, Anand Rathi Financial Services said, Participants were truly excited by the prospects of huge investments by China in Indias infrastructure, railway and manufacturing projects.

Also, the threat of an immediate outflow of funds disappeared after the US Fed meet. With the US rate rise possibilities becoming a more distant reality, emerging economies including India can expect to keep their hot monies hot for some more time, said Debopam Chaudhuri, chief economist, ZyFin Research. The Volatility Index India VIX stood at 12.3250 down around 4.80 per cent, indicating that foreign investors are not panicking and they want to stay invested for the long term.

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Rupee ducks broader Asian currency fall

The rupee gained on Thursday tracking a rally in domestic shares on hopes the country would retain its appeal to foreign investors, despite uncertainty about the outlook for US interest rates that hit other emerging markets.

Although emerging Asian currencies were hit, the rupee gained as Indian shares rose nearly 2 per cent on speculation of strong foreign buying due to improving domestic fundamentals. The rupee ended at 60.83/84 per dollar. REUTERS

Gold hits 3-1/2 month low

Gold prices took severe beating and plummeted to nearly three-and-a-half-month low at the domestic bullion market Thursday as traders and stockists dumped the metal for fear of a steep slide in overseas markets. Silver also tanked under intense selling pressure and subdued industrial demand.

Standard gold (99.5 purity) slumped by Rs 275 to finish at Rs 26,575 per 10 grams. PTI

10-yr bond yield hits 11-month low

Indias benchmark 10-year bond yield dropped to its lowest level in more than 11 months on Thursday on hopes foreign investors would continue to bet on India despite some concerns about US rates. The benchmark 10-year bond yield closed down 5 basis points at 8.45 percent, its lowest level since October 11. The 10-year paper also saw its biggest single-day decline in yields since August 20. REUTERS