Riding a double dose of good news, Indian equity markets on Wednesday posted one of its swiftest gains in recent times. The good news on the domestic front was that RBI had tightened external commercial borrowings (ECB) norms following tacit instruction from the government. Further good news came from the US where the Federal Reserve decided to keep interest rates unchanged. Following the Fed?s decision, there was a return of bullish sentiment across the globe.
The 30-share Sensex of the BSE was up 375.21 points, or 2.51%, to wind up at 15,307.98 points. The broader S&P CNX Nifty of the NSE also rose substantially by 102.55 points, or 2.35%, before closing at 4,458.90 points.
US markets marched upwards following the Fed?s decision to leave benchmark interest rates unchanged at 5.25% in line with expectations. However, experts say that while tightening credit conditions, the Fed had increased the downside risks to the US economy. Inflation still seems to be its main concern.
The Dow Jones Industrial Average rose 35.52 points, or 0.26%, to end at 13,504.30, while the S&P 500 Index gained 9.04 points, or 0.62%, at 1,476.71 and the Nasdaq Composite advanced 14.27 points, or 0.56%, before closing at 2,561.60.
Back home, IT sector stocks were among the top gainers of the day. Infosys Technologies was up 4.73%, or Rs 88.85, to close at Rs 1, 967.60, followed by TCS, up 4.13% or Rs.45.80, at Rs.1,153.70, Wipro, up 3.69% or Rs 16.95 at Rs.476.25, and Satyam Computer, up 3.53% or Rs 16.30 before closing at Rs.479.30. Index major Reliance Industries managed to gain 3.87%, or Rs.69.80, to close at Rs.1,875.65.
Navjeet S Sobti, executive vice-chairman of Allianz Securities, stated that Wednesday?s sharp gains in IT sector stocks were mainly due to the recent RBI directives on ECBs.
The market breadth, which indicates the overall health of the markets, looked strong on Wednesday.