Markets open higher on Fed stimulus optimism

Markets opened on a positive note this Wednesday led by gains in software makers and technology companies.

Global risk appetite surged after two senior Federal Reserve officials hinted on continuation of US central bank’s stimulus plan to support flagging growth.

Meanwhile, Bank of Japan concluded its two-day policy meet with Governor Haruhiko Kuroda giving a go-ahead to monthly bond purchases in order to achieve 2 per cent inflation target.

At 9:15AM, the Bombay Stock Exchange's 30-share index Sensex rose 39 points at 20,151 while the National Stock Exchange's 50-share gained 13 point at 6,127. 

Investors are now looking forward to US Federal Reserve chairman Ben Bernanke's testimony to US lawmakers and the minutes of the Fed's May meeting, both due later today for further clarification on stimulus measures and economic growth.

Asian shares gained momentum with China’s Shanghai Composite adding 0.2% to 2,312, Singapore’s Straits Times rose 0.5% to 3,460 while Japan’s Nikkei gained 1% to 15,559 today. Trading on Hong Kong equity markets will be delayed due to a storm warning.

Back home, the key sectoral indices such as IT, realty, capital goods, banks and power gained on the BSE.

The gainers included counters such as Tata Motors gaining 1% , Infosys and Wipro rose 1.2% each, Sun Pharma was up 0.7% on the BSE.

The laggards were ITC down 0.5%, HUL fell 0.1%, Bajaj Auto dropped 0.08% while Tata Steel declined 0.7% on the BSE.

The broader markets gained with mid-caps and small-caps rising nearly 0.3% on the BSE.

The market breadth was positive. Out of 486 stocks traded, 372 stocks gained compared to 99 declines on the BSE.