Sensex closes a 2-week high ahead of Fed meet; jumps 258 points

The benchmark BSE Sensex on Wednesday surged by 258 points to 25,963.97 on selective buying in blue-chips like Bharti Airtel, Sun Pharma and Bajaj Auto as investors are betting that the US Fed will not raise interest rates this week in view of Chinese financial crisis.

All eyes are now on the crucial two-day US Federal Reserve meeting starting today, where the rate-setters are going to take a call on raising the borrowing costs.

Hiren Dhakan Associate Fund manager of Bonanza Portfolio said, "... markets are betting on the odds of interest rates not being raised this meet as Chinese financial crisis is still having its say on the world economy."

No fresh weakness in rupee also helped.

Sentiment remained upbeat as investors are hopeful that the Reserve Bank would cut rate for the fourth time this year at its policy review on September 29 after data showed retail inflation easing to 3.66% in August.

After opening in the positive zone, the 30-share Sensex barometer rose further to regain the 26,000-level and hit a high of 26,006.75 in afternoon trade.

But it failed to sustain momentum due to profit-booking at higher levels and slumped to 25,816.50, before settling higher by 258.04 points or 1% at 25,963.97 -- its highest closing since August 31.

The gauge had retreated from a two-week high by losing 150.77 points in the previous trading session on Tuesday.

Also, the 50-issue NSE Nifty after reclaiming 7,900-level advanced to hit the day's high of 7,913.90, before closing at 7,899.15 up 70.05 points or 0.89%.

Both indexes marked their highest close since August 31.

Stock exchanges will remain closed tomorrow on account of Ganesh Chaturthi.

Shares of banking, power, healthcare, teck, auto and IT sectors firmed up, while consumer durable, refinery, realty and capital goods settled in the red.

Among other Asian markets, Shanghai Composite jumped 4.89%, while indices like, Hong Kong, Japan, Singapore, South Korea and Taiwan rose by up to 2.38%.

European stocks were also trading higher as key indices in France, Germany and the UK climbed by up to 1.25%.