Mumbai: Indian equities staged a broad-based recovery Thursday, with the Sensex rising 905 points and the Nifty closing above 22,900, as supportive global cues after the US Federal Reserve's overnight decision to hold policy rates triggered buying across sectors.
The US Federal Reserve voted to keep its benchmark interest rate unchanged in a target range of 3.75% to 4%, triggering a retreat in US yields. The near-1% slide in US benchmark 10-year yields offered some relief to equities, although uncertainty over the global interest-rate outlook continued to weigh on investor sentiment. The 30-share BSE Sensex gained 905.01 points, or 1.24%, to settle at 74,151.04, while the NSE Nifty advanced 237.90 points, or 1.05%, to close at 22,936.75.
The rebound followed the previous session's weakness and was supported by buying in banking, financial services and other heavyweight stocks.
All sectoral indices except auto ended higher. Nifty Bank, Media, Infrastructure, PSU Bank, Private Bank and Energy indices gained around 1% each, while IT, Consumer Durables, Metal, Oil & Gas and Realty rose more than 0.5%.
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Broader markets also inched up along with benchmark indices. The Nifty Midcap 150 index went up 0.8%, while Nifty Smallcap 250 index gained 0.6%.
"Domestic equities staged a strong recovery, reversing part of the weakness seen in the previous session," said Sunny Agrawal, head, fundamental research, SBI Securities. He said buying in large-cap stocks and strength in rate-sensitive sectors, including banking, financial services, FMCG and realty, contributed to the gains.
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However, crude oil prices above $110 a barrel remain a key macroeconomic risk for import-dependent economies such as India.
Brent crude remained elevated around $114-115 a barrel amid concerns over potential supply disruptions in West Asia.
Market direction will continue to depend on crude oil prices, geopolitical developments, foreign fund flows and movements in global bond yields, said Ajit Mishra, SVP Research Religare Broking.
He also said while the rebound improved near-term sentiment, sustained buying will be needed to confirm a durable recovery.
Foreign portfolio investors net sold shares worth ₹943 crore on Thursday taking the total net sales in October so far to ₹48,760 crore. Domestic institutions (DIIs) were net buyers to the tune of ₹1,924 crore, taking the cumulative net investments in equities to ₹63,037 crore in October so far.
On the technical front, Mishra said the Nifty's move above the 20-day exponential moving average (EMA) zone around 22,825 offered near-term relief and improved the prospects of an advance towards 23,100-23,300.
"The 22,500-22,700 zone is likely to provide immediate support, while 22,200-22,400 remains an important downside reference," he said.
