NEW DELHI: The domestic equity market surged on Thursday as the Federal Reserves’ dovish stance on interest rates, coupled with India’s strong PMI reading lifted spirits. The BSE Sensex gained 539.50 points or 0.75% to settle at 72,641.19 while the NSE Nifty50 index added 172.85 points or 0.79% to close at 22,011.95.
The market capitalisation of all BSE-listed firms jumped to nearly Rs 380 lakh crore from nearly Rs 374 lakh crore in the previous session, making investors richer by Rs 6 lakh crore in a day.
The US Federal Reserve in its most recent meeting left the benchmark interest rates untouched at the range of 5.25% to 5.50% but signalled that there could be three rate cuts this year. This dovish outlook lifted sentiments related to equities worldwide.
“Fed Chair Jerome Powell’s message remained dovish, continuing to suggest a potential rate cut in June. The Fed hinted at the possibility of three rate cuts in FY25. Indian markets responded favourably to the positive global sentiment, spurred by outcome of the FOMC meeting, which bolstered hopes for three rate cuts in FY25,” said Vikram Kasat, Head - Advisor at Prabhudas Lilladher.
HSBC composite PMI data rose to 61.3% in March as against 60.6% in February, indicating that the economic condition is supportive. All sectors in the domestic market were in positive territory on Thursday, with Nifty Metal, Nifty Realty and Nifty PSU Bank leading the charge. Nifty Realty rose 3%, followed by Nifty Metal (up 2.44%) and PSU Bank (up 2.14%). The broader market outperformed the benchmarks with the BSE Midcap advancing 2.36% and the BSE Smallcap rising 2.01%. Dollar Index, which gauges greenback against a basket of currencies, fell below 103 on Thursday while rupee appreciated.
Anuj Choudhary, research analyst, Sharekhan by BNP Paribas, expects rupee to gain slightly on the rise in global risk sentiments and weakness in the US Dollar. “Firm crude oil prices may cap sharp gains. Traders may take cues from PMI, weekly unemployment claims, current account and existing home sales data from the US...USD-INR may trade in the range of 82.80-83.30 in near term,” he added.