Market update: Sensex, Nifty gain most in over 3 months on FII inflows after Fed status quo

The stock market on Thursday rose the most in over 3 months with the benchmark Bombay Stock Exchange (BSE) Sensex jumping 481 points to 27,112.21 and National Stock Exchange (NSE) Nifty soaring over 139 points to 8,114.75.

The two stock market indices gained as Foreign Institutional Investors (FIIs) pumped funds on US Federal Reserve's pledge to retain rates at low levels for a "considerable time" and rising optimism over India's trade ties with China.

With Dow Jones surging to record overnight, most Asian and European markets rose after the US central bank stuck to a plan to begin raising near-zero interest rates only in 2015.

The 30-share barometer, after opening in the negative zone, rebounded to close above the key 27,000-level for the first time since September 12. It ended at 27,112.21, gaining 480.92 points (or 1.81 per cent). This is its biggest single session gain in over 3 months since June 2 (467.51 points).

The gauge had gained over 138 points on Wednesday.

The Fed policy announcement on Wednesday night allayed fears of capital outflows. "With US rate rise possibilities becoming a more distant reality, emerging economies including India can expect to keep their hot monies 'hot' for some more time," said Debopam Chaudhuri, Chief Economist, ZyFin Research.

Domestic investors also cheered stronger trade ties with China with the country committing investments worth US $20 billion in India over the next five years.

"Participants were truly excited by the prospects of huge investments by China in India's infrastructure, railway & manufacturing projects," said Devang Mehta, Senior VP & Head - Equity Advisory, Anand Rathi Financial Services.

Buying was strong with all sectoral indices led by realty, consumer durables and capital goods ending in positive zone with gains of up to 4.65 per cent. Among the 30 Sensex scrips, 28 ended higher while two shares ended lower.

The broader 50-issue Nifty regained the 8,100-mark and touched the day's high of 8,120.85 before settling 139.25 points higher at 8,114.75. Initially, it had fallen to 7,939.70.

Thursday's 139.25-point gain is also Nifty's biggest rise in over months since June 2 (132.55 points).

Shares of Hero MotoCorp rose the most by 5.57 per cent after the company inked a pact with the Andhra Pradesh government on September 16 for setting up a two-wheeler plant in Chittoor.

Shares of Sun Pharmaceuticals ended 1.63 per cent higher after the company entered into a licensing agreement with Merck. Other major gainers included HDFC Bank (3.73 per cent), BHEL (3.51 per cent), Bajaj Auto (3.47 per cent), Dr Reddy's (3.34 per cent), L&T (3.57 per cent), Tata Motors (3.70 per cent), Maruti Suzuki (2.48 per cent), Tata Power (2.86 per cent), Tata Steel (1.60 per cent) and Wipro (2.40 per cent).