The Sensex on Thursday surged to a 34-month high and the rupee reclaimed the 61-mark against the dollar as the US Fed unexpectedly kept its stimulus intact, easing capital outflow worries and kindling hopes the RBI will roll back some liquidity-tightening steps on Friday.
The US Federal Reserve surprised the markets on Wednesday by saying it will continue with its monthly $85-billion bond buying programme and wait for more signs of growth recovery.
Joining a global stock rally, the BSE benchmark Sensex soared 684 points to 20,646.64 on buying in rate-sensitive sectors, including banking. Investors were richer by Rs 1.84 lakh crore as 1,430 stocks on the BSE surged. In step with stocks, the rupee, which has strengthened after touching an all-time low of 68.85 last month, zoomed further by 161 paise to end at a one-month high of 61.77.
Foreign institutional investors (FIIs) pumped in a whopping Rs 3,500 crore in stocks on Thursday as the Fed’s status quo on stimulus makes liquidity available for investing in emerging market assets.