Sensex closes 254 pts up on US interest rate status quo

Relieved by the status quo in US interest rates, Indian share markets closed higher on Friday, overshooting most Asian peers, as investors saw momentary respite from a potential shift of global funds away from emerging economies.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opened on Friday at 26,130.36 points against Wednesday's close at 25,963.97 points - Thursday being a festive holiday.

The 30-share benchmark barometer Sensex closed at 26,218.91 points, with a gain of 254.94 points or 0.98 per cent.

At the National Stock Exchange (NSE), the trend was similar. The broader 50-scrip Nifty, which had closed at 7,899.15 points on Wednesday closed at 7,981.90 points, with a gain of 82.75 points or 1.05 per cent.

Till late Thursday, there was some fear of a rate hike in the US, which could have potentially seen a flight of capital from emerging markets like India to the US. In fact, during August and September, foreign funds have been net sellers of Indian equities worth Rs.20,225 crore.

Even as the global financial markets speculated over when the US central bank will end its zero-interest rate policy, the Fed Chair Janet Yellen instead opted for a status quo. While she said the US recovery was solid, concern was expressed over the global economic situation.

The reaction was mixed in the Asian markets. Japan's Nikkei and Tokyo's broader Topix were down nearly 2 per cent.

China's Shanghai Composite Index was fluctuating back and forth around the positive-negative territory initially. Later, it rallied by 0.23 per cent. While Hong Kong's Hang Seng was up 0.30 per cent, Korea's Kospi was quoting higher by 0.98 per cent.

In the US earlier, trading was marked by sharp volatility as blue-chip stocks fell, bond prices rose and the dollar posted its steepest single-day loss in a month against a basket of currencies, as the investor mood turned sullen after the Fed's rate status quo and concerns over global economy.

All major indices took a beating - 0.39 per cent for Dow Jones industrial Average, 0.26 per cent for S&P 500 and 0.1 per cent for the Nasdaq Composite. The dollar index, measuring the greenback against six currencies, fell 1.1 per cent.