Mkts snap 3-session slide on Dovish US Fed

Equity indices found firmer ground on Thursday after three sessions of losses, buoyed by metal and IT counters, in tandem with a positive trend overseas after the US Federal Reserve reiterated its Dovish policy stance.

A strengthening rupee and short-covering in select heavyweights added to the momentum, traders said. The 30-share BSE Sensex climbed 209.36 points or 0.40 per cent to close at 52,653.07, while the broader NSE Nifty advanced 69.05 points or 0.44 per cent to 15,778.45 points.

"Domestic equites recovered today as positive global cues and strong buying in metal and IT stocks supported markets. Further, short covering in select heavyweights also aided rebound. Notably, persistent soft monetary policy stance of Federal Reserve and least possibility of any reversal of monthly bond buying in the near to medium term augur well for emerging markets including India. Strong buying was seen in quality mid-cap and small-cap stocks after the recent fall, while volatility index contracted by 5 per cent," said Binod Modi, head (strategy) at Reliance Securities.

Vinod Nair, head (research) at Geojit Financial Services, said: "Global markets were on track to rebound after the panic sell-off surrounding Fed policy and Chinese tech crackdown cooled off. China's attempt to calm investor's nerves also helped the market to take a breather. Meanwhile, metal stocks were sparked by the huge infrastructure fiscal package finalized in the US, in anticipation of high demand."

Foreign institutional investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 2,274.77 crore, as per exchange data. World stocks advanced after the Federal Reserve kept rates at near-zero and said it is in no hurry to taper its asset purchase program. Meanwhile, Chinese authorities met with banks to ease concerns about the recent regulatory crackdown on internet companies. In Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul ended with gains. Equities in Europe were also trading on a positive note in mid-session deals.

Tata Steel hogged the limelight in the Sensex pack, rallying 6.87 per cent, followed by Bajaj Finserv, SBI, HCL Tech, Sun Pharma, Bajaj Finance and Reliance Industries.