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Business News/ Market / Stock-market-news/  Fed, China propel Sensex, Nifty surge
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Fed, China propel Sensex, Nifty surge

Both the benchmark indices, Sensex and Nifty, post their biggest single-day gain since 2 June

Sensex rose 481 points, after the US Federal Reserve renewed its zero-interest pledge and as investors cheered the strengthening of economic and trade ties with China. Photo: Hemant Mishra/MintPremium
Sensex rose 481 points, after the US Federal Reserve renewed its zero-interest pledge and as investors cheered the strengthening of economic and trade ties with China. Photo: Hemant Mishra/Mint

Mumbai: Indian shares rallied on Thursday, with the Sensex rising more than 500 points in intra-day trade, after the US Federal Reserve renewed its zero-interest pledge. Investors also cheered the strengthening of economic and trade ties with China.

Both the benchmark indices, Sensex and Nifty, posted their biggest single-day gain since 2 June.

Prime Minister Narendra Modi won a pledge from visiting Chinese President Xi Jinping to invest $20 billion in India. Experts view this as a new chapter in the India-China relationship.

“The major hangover on the market—the Fed meeting—is out of the way, which is a respite for now as there are no immediate rate hikes on the horizon," said Devang Mehta, senior vice-president and head of equity advisory at Anand Rathi Financial Services Ltd.

The US Federal Reserve on Wednesday renewed a pledge to keep interest rates near zero for a “considerable time" and reiterated concerns over slack in the labour market.

“The market is also excited about the prospects of huge investments by China, after similar vibes from Japan," Mehta added.

Indian and Chinese companies signed 24 agreements valued at $3.43 billion in sectors including aircraft leasing and financing, telecom, chemicals, wind power components, textiles and seafood.

On Wednesday, Industrial and Commercial Bank of China Ltd (ICBC) signed a deal to provide $2.6 billion in financing for IndiGo Airlines to buy and leaseback more than 30 Airbus A320 planes. Also, CSR Corp. won a 300 million yuan ($49 million) contract to provide cars and maintenance for a metro line in Mumbai.

The Sensex ended higher by 1.81%, or 480.92 points, at 27,112.21 points, while the Nifty rose 1.75%, or 139.25 points, at 8,114.75 points.

The gainers included Hero MotoCorp Ltd, which added 5.6% to 3,000. Pawan Munjal, the company’s vice-chairman and managing director, wants India’s largest motorcycle maker to go global and plans for sales in the US and Europe by 2016. A partnership with golfer Tiger Woods announced this week reflects Hero’s effort to raise the profile of a brand with little exposure outside India since the company’s creation 30 years ago. New Delhi-based Hero seeks foreign sales of more than 1 million motorcycles and scooters by the decade’s end.

Housing Development Finance Corp. Ltd (HDFC) rose 3.7% to close at 1,055.65.

Among the losers, Infosys Ltd fell 1.4% to 3,690 and Hindustan Unilever Ltd fell 0.5% to 751.35.

All the sectoral indices ended in the green. The S&P BSE Realty index was the top gainer, up 4.7%. The S&P BSE Consumer Durables and S&P BSE Capital Goods indices gained 3.2% and 2.8%, respectively. The S&P BSE Auto index added 2.7%, while the S&P BSE Power index was up 2.2%. The S&P BSE Bankex, S&P BSE Healthcare, S&P BSE Oil and Gas and S&P BSE Metal indices rose 2%, 1.8%, 1.6% and 1.2%, respectively. The S&P BSE Teck and S&P BSE IT indices gained 0.8% and 0.6%, respectively.

Larsen and Toubro Ltd rose 3.7% to 1,574.90 after the company announced that it has won an order from Oman for the construction of Adam air base.

Sun Pharmaceutical Industries Ltd added 1.6% to 805.20 after the company announced that it has entered into a licensing agreement with Merck and Co. Inc. for investigational therapeutic antibody candidate, Tildrakizumab, to be used for treating plaque psoriasis. Under the terms of the agreement, Sun Pharma will acquire the worldwide rights to Tildrakizumab for use in all human indications from Merck in exchange for an upfront payment of $80 million, the companies said in a joint statement.

Shares of realty sector companies closed higher after PTI reported that a meeting of all stakeholders has been convened on Friday to seek their views on a key Bill that seeks to pave the way for construction of a large number of affordable houses.

Unitech Ltd rose 12.9%, Housing Development Infrastructure Ltd 9.2%, Phoenix Mills Ltd 6.9%, DB Realty Ltd 5.1%, Indiabulls Real Estate Ltd 4.9%, DLF Ltd 3.7% and Oberoy Realty Ltd 3%.

Since the beginning of this year, the Sensex has gained 28.06%, while foreign institutional investors have bought $14.09 billion from local equity markets.

Reuters and Bloomberg contributed to this story​.

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Published: 18 Sep 2014, 10:39 AM IST
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