Global rally lifts Sensex 309pts post Fed rate hike; RIL up

Moneycontrol Bureau

Equity benchmarks ended at two-week closing high on Thursday, tracking rally in global peers after the first Fed rate hike in almost a decade. Index heavyweights drove the market higher. The broader markets outperformed benchmarks, rising more than 1.5 percent.

The market rallied for fourth consecutive session today. It was a U-shape recovery for benchmark indices as the market slipped in red after rallied for first half an hour of trade but it managed to rebound significantly in last couple of hours of trade.

The 30-share BSE Sensex surged 309.41 points or 1.21 percent to 25803.78 and the 50-share NSE Nifty rose 93.45 points or 1.21 percent to 7844.35. The market breadth was strong as nearly three shares advanced for every share declining on the Bombay Stock Exchange.

Analysts feel that after Fed rate hike, the next trigger may be oil price that has been hitting multi-year lows amid supply glut concerns.

"Markets tend to switch around their focus fairly quickly. I think the attention will switch to the weakness in oil," says Guy Stear of Societe Generale, adding that the crude slump will manifest itself in different ways for different countries and markets.

Vibhav Kapoor expects next Fed rate hike in March.

Finally Federal Reserve raised interest rates by 25 basis points, which was the first rate hike since 2006. In Europe, Germany's DAX surged 3 percent followed by France's CAC (up 2.6 percent) and Britain's FTSE (up 1.5 percent). Asian markets also closed higher with the Nikkei and Shanghai up more than 1.5 percent.

Crude oil prices extended fall with the Brent crude down 0.5 percent to USD 37.18 a barrel and NYMEX crude down 1.13 percent to USD 35.12 a barrel amid surprise build in US inventories.

Back home, the rupee also gained further on Fed rate hike, up 31 paise to 66.42 a barrel.

Mahindra & Mahindra bounced back on short covering, up 2.3 percent. The stock plunged over 5 percent in previous session after Supreme Court banned diesel vehicles (with engine capacity over 2000cc) in Delhi.

Metals topped the buying list on Sensex with Nifty Metal rising over 3 percent. Tata Steel, Hindalco Industries and Vedanta gained 3-5 percent.

Reliance Industries was top contributor to Sensex's gains, up 3 percent. Citi has maintained buy call on the stock, saying it is a top pick in sector.

SBI climbed 1.6 percent as the board will consider fund raising plans on December 21.

HDFC, HDFC Bank, Infosys, TCS, Sun Pharma and L&T gained 1-2 percent while ONGC, Axis Bank, Lupin and GAIL were only losers on Sensex.

In broader space, Aurobindo Pharma was up 1.5 percent on getting approval from USFDA for anti-diarrheal and anti-inflammatory drugs. IVRCL surged 6 percent ahead of board meeting (on December 19) to consider strategic debt restructuring.

Deccan Gold Mines jumped 10 percent as the company started drilling operations at Karnataka blocks. Sunil Hitech Engineers plunged 20 percent as income tax authorities are carrying out search proceedings at company's office premises.