Sensex rockets 565 points on hopes US Fed will delay rate hike

Mumbai: Market benchmark Sensex Monday rose for the fourth straight by surging 564.60 points to close at one and a half months high of 26,785.55 tracking upbeat Asian and European cues after US jobs data fuelled speculation that the Fed will not raise interest rates any time soon.

On the domestic front, Sensex's biggest single day rise in nine months since January 15, was supported by the rupee gaining some muscle against the dollar.

The rally in Indian shares was a part of the smart upmove seen in global stocks triggered by expectations that the US Federal Reserve will delay the first interest rate hike in almost a decade in wake of a lackluster US jobs data.

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"The odds of a US rate hike during October have lessened due to poor payroll data," said Vinod Nair Head-Fundamental Research at Geojit BNP Paribas Financial Services.

After tracking bullish global cues, the 30-share Sensex scaled the day's high of 26,822.42 and closed 564.60 points or 2.15 percent higher at 26,785.55, a level last seen on August 21.

Sentiment was also upbeat as a number of banks announced a reduction in base rates during the past few days in the wake of a steeper-than-expected 50 basis points cut in the repo rate by the Reserve Bank of India.

Sensex has rallied by 1,168.71 points in four sessions, since the monetary policy review last week.

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On the day, 50-share NSE Nifty also recorded second biggest rise on the calender year by surging 168.40 points or 2.12 percent to close at 8,119.30.

Both the indices, Sensex and Nifty, posted their biggest single day gains since January 15.

Out of the 30 Sensex stocks, 26 ended with gains while -- Maruti Suzuki, Dr Reddy's, Lupin and HUL -- lost.

Shares of Tata Motors emerged as the top gainer among the Sensex pack by surging 6.13 percent on sales data and reports that its Jaguar Land Rover sales surged in the US.

Global markets were largely positive, on expectations that Beijing will take steps to accelerate growth and dimmed prospects of a near-term interest rate hike by the US Federal Reserve.

Indexes from China, Tokyo, Hong Kong, South Korea indexes firmed up in the region 0.76 percent to 1.62 percent. While, gains between 2.12 percent and 3.35 percent were seen from Europe.

Pramit Brahmbhatt Veracity Group CEO said: "Some blue-chip took over the charge and helped the indices to trade strong as disappointing US jobs data lowered the probability of near term Fed interest rate hike."

Major gainers from Sensex were Tata Motors (6.13 percent), Tata Steel (5.82 percent), ICICI Bank (4.90 percent), Hindlaco (4.74 percent), HDFC (4.73 percent), Larsen (4.12 percent), Hero MotoCorp (4 percent), ONGC (3.40 percent), Axis Bank (3.33 percent) and Bajaj Auto (3.05 percent).

However, Maruti fell by 3.59 percent, Lupin dropped 1.14 percent and Dr Reddy's shed 1.13 percent.

Among BSE sectoral indices, capital goods rose by 3.28 percent followed by bankex 2.80 percent, metal 2,49 percent, power 2.31 percent, auto 2.12 percent, consumer durable 1.92 percent, oil&gas 1.75 percent, teck 1.37 percent, IT 1.28 percent and realty 1.14 percent.

Small-cap and mid-cap indices also rose by 1.62 percent and 1.79 percent on buying support from retail investors.

The market breadth remained positive, as 2,001 stocks ended in the green while 792 finished in red while 99 ruled steady.

The total turnover moved up nearly to Rs 3,036 crore from Rs 2,937.37 crore on last trading session.