Markets cheer Fed decision; Nifty reclaims 8,000

Markets have extended gains and are trading near day’s high led by strong buying among financials, capital goods and power sectors.

Indian stock markets are witnessing upbeat trend after the US Fed Reserve decided to keep the interest rates unchanged on concerns about weakness in US economy and other emerging markets.

At 10:35 am, the Sensex was higher by 417 points at 26,381 and the Nifty gained 129 points at 8,028.

Among broader markets, BSE Midcap and Smallcap indices are up almost 1%. Market breadth is positive with 942 advances and 196 declines.

In the currency front, the rupee strengthened by 32 paise to 66.14 against the US dollar in early trade today at the Interbank Foreign Exchange after the American currency tumbled against major world currencies as the Federal Reserve decided again not to increase interest rates.

GLOBAL MARKETS

Asian shares fell on Friday after the Federal Reserve held off on raising interest rates, reviving concerns about weakness in both the US and global economies.

The dollar was on the defensive, having fallen more than 1% after the Fed's decision, while US bond yields plunged, erasing their sharp rises in the past couple of days.

The Nikkei average fell nearly 2% and MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.2%.

Major Wall Street indexes gave up a 1% rally to end lower, with the S&P 500 index losing 0.3%. S&P futures dipped 0.2% in the Asian morning.

Fed Chair Janet Yellen said the outlook abroad has appeared to become less certain, adding that recent falls in US stock prices and a rise in the value of the dollar already were tightening US financial market conditions.

Yellen said she wanted to see more improvement in the US labour market and expressed concern over weak inflation.

Referring to the global outlook, Yellen explicitly said the central bank was focusing on the slowdown in China and emerging markets, saying one key issue is whether there might be a risk of a more abrupt slowdown in China.

SECTORS & STOCKS

BSE Bankex has surged over 3% followed by counters like Realty, Capital Goods, Power, Oil & Gas, Metal, Auto and Consumer Durables, all rising between 1-2%. Bank Nifty has surged over 3% at 17,496 levels.

The top gainers from the Sensex pack are Axis Bank, ICICI Bank, M&M, SBI, HDFC Bank, Lupin, Hero Moto and ONGC.

Seeking to further relax foreign investment norms, the government is considering increasing the foreign direct investment (FDI) limit in private banks to 100%, from the existing 74%.

The Department of Industrial Policy and Promotion (DIPP) has sent a proposal to hike the FDI limit in the private banking industry to the Department of Financial Services for its comments, sources said.

Tata Steel will sell shares in automaker Tata Motors worth up to $188 million, according to a term sheet of the deal seen by Reuters on Friday. Shares of Tata Steel are up almost 1%. However, Tata Motors has slumped by over 2%.

Shares of Infosys are up nearly 1% at Rs 1,112 on the Bombay Stock Exchange after the IT major in a release announced that Qantas Credit Union has selected Infosys Finacle to improve its customers's digital experience, as part of their business transformation strategy.

GAIL is down almost 1%. State gas utility GAIL India has re-invited bids to hire nine newly-built LNG ships on modified terms that allow Indian shipyards to pick up to 13 per cent stake in three of these carriers that shipbuilders have to make in the country.