Sensex, Nifty Hit Record Highs on Fed Rate Cut Hopes

Mumbai, Dec 14 (PTI) Benchmark equity indices Sensex and Nifty rallied over 1 per cent to hit all-time highs on Thursday, propelled by intense buying in IT, tech and realty stocks after the US Federal Reserve kept its key interest rate unchanged and signalled rate cuts next year.

Persistent buying by foreign investors and sliding crude oil prices in the international markets also supported domestic equities, traders said.

Rising for the second straight session, the 30-share BSE Sensex jumped 929.60 points or 1.34 per cent to settle at 70,514.20, its all-time closing high. During the day, it surged 1,018.29 points or 1.46 per cent to hit its all-time intra-day peak of 70,602.89.

A total of 2,064 stocks advanced while 1,702 declined and 126 remained unchanged.

The Nifty rallied 256.35 points or 1.23 per cent to settle at a record closing high of 21,182.70. During the session, it jumped 284.55 points or 1.35 per cent to 21,210.90, its record intra-day peak.

"The market continued its exuberance and hit a fresh high amid the dovish commentary from the Federal Reserve, signalling at least three rate cuts in 2024. Further, the sharp fall in US bond yields improved investors' confidence.

"An upgrade in India's GDP forecast, ease in global oil prices, and the RBI decision to clamp down inflation to the target level led to a broad-based rally with outperformance from Realty and IT," said Vinod Nair, Head of Research at Geojit Financial Services.

Among the Sensex firms, Tech Mahindra, Infosys, Wipro, HCL Technologies, IndusInd Bank, Bajaj Finance, Bajaj Finserv and Mahindra & Mahindra were the major gainers.

On the other hand, Power Grid, Nestle, JSW Steel, Maruti, Titan and Tata Motors were among the laggards.

In the broader market, the BSE midcap jumped 1.06 per cent and smallcap climbed 0.62 per cent.

Among the indices, realty rallied 3.80 per cent, IT jumped 3.21 per cent, realty (3.80 per cent), teck (2.72 per cent), telecommunication (2.14 per cent), financial services (1.38 per cent), oil & gas (1.36 per cent) and energy (1.28 per cent).

Consumer Durables emerged as the only laggard.

In Asian markets, Seoul and Hong Kong settled in positive territory, while Tokyo and Shanghai ended lower.

European markets were trading in the green. The US markets ended with significant gains on Wednesday.

The Federal Reserve kept its key interest rate unchanged on Wednesday for a third straight time, a sign that it is likely done raising rates after having imposed the fastest string of increases in four decades to fight painfully high inflation.

The Fed's policymakers also signalled that they expect to make three quarter-point cuts to their benchmark interest rate next year.

"The US Fed's decision to leave rates unchanged lifted the world equity market mood, including India, which saw benchmark indices reach yet another record high on the back of a frenzied buying support. Besides, falling crude oil prices and foreign investors pumping in money into domestic equities have bolstered investors' sentiment.

"With India continuing to post strong growth numbers and hopes of rate cut expected in the middle of next year, optimism in equity markets could continue in the medium term," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Foreign Institutional Investors (FIIs) continued to remain buyers as they bought equities worth Rs 4,710.86 crore on Wednesday, according to exchange data.

Global oil benchmark Brent crude climbed 1.74 per cent to USD 75.55 a barrel.

The BSE benchmark advanced 33.57 points or 0.05 per cent to settle at 69,584.60 on Wednesday. The Nifty gained 19.95 points or 0.10 per cent to 20,926.35.