Speedy reforms buoy markets; Sensex up 346 points

A string of infrastructure project clearances and clarity on interest rate hike in the US buoyed Indian equity markets during the mid-afternoon trade session on Thursday.

In addition, value buying, strengthening rupee and central government's decision to hike public spending in various infrastructure projects restored investor confidence and led a barometer index to gain 346 points or 1.36 percent.

Attractive stock prices, announcements over disinvestment and interest subvention scheme for exporters also brought back investors.

On Wednesday, the union cabinet, headed by Prime Minister Narendra Modi, was in overdrive as it approved 27 decisions -- including some key ones such as divestment of equity in Coal India and direct subsidy for cane farmers.

These decisions signalled continuation of economic reforms and closely follow an official note issued last week, in which foreign equity norms were relaxed in some 16 sectors.

The government's efforts to reach out to the opposition before the crucial winter session to get the Goods and Services Tax (GST) bill passed, cheered the markets.

On Thursday, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made healthy gains during the mid-afternoon session. It was higher by 101.95 points or 1.32 percent at 7,833.75 points.

Similarly, the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) also rose during the session under review.

The S&P BSE Sensex, which opened at 25,640.34 points, was trading at 25,828.08 points (1.45 p.m.), up 345.56 points or 1.36 percent from the previous day's close at 25,482.52 points.

The Sensex has touched a high of 25,854.51 points and a low of 25,603.10 points during the intra-day trade.

The federal open market committee (FOMC) minutes of the US Fed's October meeting which were released late on Wednesday lessened chances of a rate hike.

The minutes decreased the possibility of a rate hike in December, as inflation and retail sales have shown less-than-expected growth.

The FOMC assumes significance as higher interest rates in the US are expected to lead away FPIs (Foreign Portfolio Investors) from emerging markets such as India.

It is also expected to dent business margins, as access to capital from the US will become expensive.