The US Federal Reserve lowered its benchmark interest rate after more than four years, the benchmark equity indices Sensex and Nifty soared to new all-time highs in early trade on Thursday.
A new all-time high of 83,684.18 was reached by the 30-share BSE Sensex in early trade, rising 735.95 points. To reach a new record high of 25,587.10, the NSE Nifty also increased by 209.55 points.
“The big Fed rate cut by 50 bps has the potential to take equity markets into a consolidation phase with an upward bias. The rate cuts by the Fed will pave the way for rate cuts in India, too,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. More rate cuts are expected from the Fed going forward, Vijayakumar added.
The top gainers among the 30 Sensex companies were NTPC, Axis Bank, Tata Motors, Tata Consultancy Services, Bharti Airtel, Tech Mahindra, Infosys, and HDFC Bank. Bajaj Finserv was the only one to lag behind. Shanghai, Hong Kong, Tokyo, and other Asian markets saw gains, while Seoul quoted marginally lower.
The US markets ended lower on Wednesday. Exchange data indicates that on Wednesday, equities worth ₹ 1,153.69 crore were purchased by Foreign Institutional Investors (FIIs). “The 50 bps rate cut is a bold stance by the US Fed to revitalize their subdued economy, which will in turn open the door for other global central banks, including the RBI, to kick-start the softer interest rate regime,” Vijay Bharadia, Founder, Wallfort Financial Services Ltd., said.
Global oil benchmark Brent crude fell 0.07 percent to USD 73.60 per barrel. On Wednesday, the BSE benchmark fell 131.43 points, or 0.16 percent, to end the day at 82,948.23. In addition, the NSE Nifty dropped 41 points, or 0.16 percent, to close at 25,377.55.
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