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US Fed rate pause, slower FPI selling lift sensex by 905 pts

By · Via Times of India · Published by Everything Blog

In short

The BSE Sensex settled at 74,151 while the NSE Nifty closed at 22,937, propelled by steady domestic buying that cushioned the market against broader macro risks. Foreign institutional investors offloaded a net Rs 944 crore on Thursday, but domestic funds countered by purchasing a net Rs 1,924 crore. Meanwhile, volatile individual movers like Jio Platforms swung sharply between Rs 1,490 and Rs 1,381 before settling marginally higher at Rs 1,423.

Key points

  • Strong domestic institutional buying neutralized net outflows of Rs 944 crore from foreig…: Strong domestic institutional buying neutralized net outflows of Rs 944 crore from foreign institutional investors.
  • Benchmark indices registered strong gains despite Brent crude trading near $110 per barre…: Benchmark indices registered strong gains despite Brent crude trading near $110 per barrel and the rupee weakening.
  • A pause in interest rate hikes by the US Federal Reserve helped revive broader investor r…: A pause in interest rate hikes by the US Federal Reserve helped revive broader investor risk appetite.

Sources checked by our analysis pipeline: 1

MUMBAI: The US central bank's decision to keep interest rates unchanged late on Wednesday, combined with some slowdown in the intensity of selling by foreign funds in recent days, boosted investor sentiment on Dalal Street on Thursday. As a result, sensex rallied 905 points or 1.2% to close at 74,151 points while on NSE, Nifty jumped 238 points or 1.1% to close at 22,937 points.

The gains in the leading indices came despite Brent crude prices hovering around the $110 per barrel level and the rupee slightly weaker below the 95-to-the-dollar mark. According to Vinod Nair, head of research, Geojit Investments, the domestic markets rallied on Thursday on the back of the Fed's rate pause decision, marginal easing in crude prices and renewed institutional buying. These factors combined to improve risk appetite for investors despite a challenging external backdrop, he said.

"Recent foreign buying alongside sustained domestic institutional support have improved liquidity backdrop. The broader thesis remains supported by selective earnings resilience and domestic demand stability, although elevated input costs could test margin durability. However, elevated Brent, rupee weakness, rising…

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