Sensex Jumps 905 Points to 74,151 as Fed Hold Lifts Indian Shares

Indian shares closed sharply higher on Thursday, October 29, with the Sensex up 905.01 points, or 1.24 percent, at 74,151.04 and the Nifty 50 up 237.90 points, or 1.05 percent, at 22,936.75. The Hindu BusinessLine and market coverage from several financial outlets carried the same closing numbers.

The rally snapped a two session losing run. Traders pointed to three supports: the US Federal Reserve holding its rate at 3.75 to 4.00 percent on Wednesday, a small easing in crude oil prices, and renewed institutional buying. Banking, FMCG and power shares led. Realty, FMCG and public sector bank indexes were among the strongest sector groups, while autos lagged.

The stocks that carried the close

Adani Ports was the biggest Sensex gainer, rising more than 5 percent in the BusinessLine account after the company reported an 18 percent rise in consolidated net profit to 3,682.44 crore rupees for the September quarter. Kotak Mahindra Bank, Power Grid, Eternal, Bajaj Finance, State Bank of India, Hindustan Unilever, Titan, NTPC, Bharat Electronics and Infosys also closed higher. Trent, Maruti Suzuki, Tech Mahindra and HDFC Bank fell. Midcap and smallcap indexes each rose close to 1 percent, and advancing stocks outnumbered decliners, which gives the move breadth beyond a few large names. The India VIX volatility gauge fell about 6.9 percent to 15.13 in one market account.

Why the Fed decision mattered in Mumbai

A US rate hold does not change an Indian company's earnings. It changes the price of money around the world. When the Fed pauses, the pressure on the dollar and on US bond yields eases at the margin, and foreign investors have one less reason to pull cash out of emerging markets. That channel ran on Thursday, even though the Fed's hold was not a dovish one: two US policymakers had wanted a hike, and inflation there is still above target. Brent crude, which had spiked above 115 dollars a barrel a day earlier in the accounts traders cited, eased by about 1 percent, which helps an oil importing economy on both inflation and the trade bill. The rupee stayed weak, near 95.2 to 95.4 per dollar in the same coverage, a reminder that the relief was partial.

What happens next

The close puts the Nifty just below 23,000, a level traders watch. The next sessions will test whether Thursday was a one day reset on global cues or the start of a steadier run, and the September quarter earnings flow will do more of the work than the Fed from here. Oil remains the swing factor. A fresh spike would hit the same import bill that Thursday's dip relieved.