Sharemasterindia.com: The BSE Sensex gained over 500 points, while the broader Nifty jumped 150 points to edge above the key 8,050 levels on Friday. The Indian rupee strengthened against the dollar and bond prices rallied tracking the US Federal Reserve's overnight decision to hold interest rates near zero.
Here's your 10-point cheat-sheet on the market rally
1) The Nifty breached the 8,050-point level for the first time since August 28, while the BSE Sensex jumped nearly 2 per cent to near the key 26,500 levels.
2) The rupee rallied to a three-week high of 65.92 per dollar, while the benchmark 10-year bond fell 4 basis points to 7.71 per cent, its lowest since August 20.
3) Stock market gains were led by rate sensitive stocks, with the sub-index of banking stocks leading sectoral indices with nearly 3.5 per cent gains. Realty and auto stocks also saw buying interest.
4) Traders attributed the solid gains in stock markets to hopes of a repo rate cut on September 29, when the Reserve Bank meets to review its monetary policy.
5) Market analyst Ambraeesh Baliga said a 25-basis point rate cut is already factored in; the RBI could surprise with a 50-basis point cut, he added.
6) Hopes of a rate cut were bolstered by the Federal Reserve's overnight decision to kept interest rates unchanged in the US.
7) A rate hike in the US could have added to the selling momentum by foreign investors, sparking turmoil in Indian stock and currency markets, analysts say.
8) Traders will be closely eyeing how foreign funds react to Fed's decision. FIIs have sold a record Rs 16,877 crore (net) worth of domestic stocks in August, leading to the recent selloff in Indian markets. On top of that, they sold nearly Rs 7,000 crore so far this month.
9) India's stocks rallied, while bond yields fell to the lowest in a month on Friday on expectations the Reserve Bank of India (RBI) will have scope to cut its key lending rate later this month after the U.S. Federal Reserve kept its interest rates unchanged.
10) Despite solid gains, many market analysts were cautious about their near-term outlook. The upcoming earnings season, Bihar assembly elections and action on reforms front will be closely tracked for further cues, traders said
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