The BSE Sensex surged by 743.95 points or 1.03% to 72,845.64 in early trade on Thursday, with NTPC and IndusInd Bank leading the gains.
According to V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the Fed’s decision to keep rates unchanged and not send a hawkish message has brought clarity and optimism to the markets. The Chief’s statement on inflation easing and a strong labor market suggest a soft landing for the US economy and the possibility of rate cuts.
The response to the Fed’s decision was positive, with US indices hitting record highs. This global market trend is expected to have a favorable impact on Indian markets as well, as per Vijayakumar.
Deepak Jasani, Head of Retail Research at HDFC Securities, noted that Asian shares and gold prices rose after the Fed’s announcement. The indication that the Fed will continue with plans for rate cuts was welcomed by equity investors.
The tug of war between Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) has been leaning in favor of DIIs lately. Vijayakumar believes that if FIIs slow down their selling and start buying, it will have a positive impact on largecaps in banking, telecom, capital goods, and automobiles sectors.
