A recovery in the European markets helped the domestic equity bourses shrug off the general nervousness prevailing in global markets ahead of the crucial US Fed meet. The 30-share Sensex of the Bombay Stock Exchange (BSE) ended the day at 15,669.12 points gaining smartly by 164.69 points, or 1.06%, thus coming out of its two-day losing streak.
Tuesday?s rally was mainly led by banking sector stocks that saw the BSE Bankex gaining 199.77 points or 2.47%. ICICI Bank was the biggest gainer among the Sensex constituents on Tuesday. It surged by Rs 30.30, or 3.39%, at Rs 925.05 followed by SBI, which closed the day at Rs 1,693.40 gaining Rs 46.85 or 2.85%.
Meanwhile, the broader S&P CNX Nifty of the National Stock Exchange (NSE) ended the day at 4,546.20 points gaining 51.56 points or 1.15%. The Nifty September futures closed the day at 4,542 points, with a discount of 4.20 points.
SP Tulsian, investment consultant, said, ?Tuesday?s market performance was good, which was mainly due the expectation that the US Fed would slash the key interest rate. Now the only question is whether it cuts the rate by 25 bps or 50bps. If it decides to slash the rate by 25 bps, we could see a negative or neutral reaction in the Indian market as this cut has already been factored in by the market. If it slashes 50bps, then Indian markets could witness a relief rally of another 100 to 200 points.?
The domestic equity market has already received a good amount of investment from foreign institutional investors (FIIs) in the run up to the US Fed meet, barring September 17. On September 14, FIIs were net buyers of equity worth Rs 1,159.40 crore in the domestic market. In September 2007, till date, they were net buyers to the tune of Rs 4,959.80 crore (over $1 billion).
