The dollar pulled back from a 12-year high against Euro ahead of Fed's two-day policy meeting starting later today.
Tracking positive global cues, the benchmark Sensex today logged its first rise in three days, gaining about 299 points to end at 28,736.38 as a batch of tepid US economic indicators triggered hopes that Fed will not raise interest rates soon.
In a highly volatile session, initial sharp gains were almost washed out in late mid-session trade but the stock markets regained form on a sudden gust of fag-end buying.
Buying was seen mainly in pharma, capital goods, FMCG, consumer durables, refinery, metal and banking shares. Some of the IT and tech counters attracted profit-booking. Ten out of twelve BSE sectoral indices closed up.
Barring Hong Kong and Singapore which closed with nominal losses, other Asian markets closed higher today as investors bet on the possibility that weaker-than-expected US data will prompt the Federal Reserve to adopt a cautious stance. If US raises rates, there is fear that emerging markets including India will see sharp capital outflows.
The dollar pulled back from a 12-year high against Euro ahead of Fed's two-day policy meeting starting later today.
The S&P BSE 30-share Sensex resumed better and rallied further by over 345 points in early afternoon trade, but heavy selling pulled it down in the negative terrain momentarily to a low of 28,435.45. It rebounded in the last hour to settle at 28,736.38, gaining 298.67 points or 1.05 per cent.
In the preceding two trading sessions, it had fallen by 492.70 points or 1.70 per cent.
Similarly, the 50-issue CNX Nifty of the NSE rebounded by 90.15 points or 1.04 per cent to 8,723.30.
Global markets generally are expecting the Federal Open Market Committee (FOMC), the Fed's policy arm, will remove the "patient" language regarding an increase in interest rates from its statement after a two-day meeting.
According to Fed data, manufacturing struggled in February, holding back overall industrial production that rose by a mere 0.1 percent in the month. Reports on homebuilder sentiment and regional manufacturing also were weaker than expected.
Fall in brent crude price and rise in rupee value also augur well for India and aided the rally.
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