US Fed gave assurance that interest rates would not be raised for some time
US Federal Reserve chief Janet Yellen chaired a meeting of the board of governors, which reassured global markets about the continuance of low-interest rate regime.
Mumbai: The markets had a spectacular rally on Wednesday after the assurance from the US Fed that interest rates would not be raised for some time calmed the global and domestic markets. The Nifty regained the 8,100 levels to close at 8114.75 up 139.25 points while the Sensex soared 480.92 points to close at 27,112.21. There was heavy short covering in and buying in capital goods, auto and bank. The markets t0ok everyone buy surprise and tossed out analysts’ predictions that markets would see a long correction.
Ambareesh Baliga, independent analyst said curiously the markets opened low even though it was known that the US Fed had put off hiking interest rates and that China was going to make significant investments were also known. He said, “Even the provisional figures for buying by FIIs and institutions on Thursday were not significant, so it is possible that the markets went up on short covering and buying by high net individuals,” he said.
HNIs could have bought in anticipation of the FIIs buying in the coming days, he said. Rakesh Goyal, senior vice president Bonanza Portfolio Trading said the Nifty faced resistance near 8,120 levels which it touched intra-day. “In the coming sessions the foreign flows would be worth watching if they continue their trend over next 3-4 sessions. The global economy has overcome one of the strongest fears of a hike in interest rates by the US Fed but the developments in the US-Iraq, Syria tensions shall decide the long term trend of markets to a great extent,” he said.
( Source : dc correspondent )
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