Equity benchmark Sensex rallied nearly 500 points in early trade on Thursday, tracking a positive trend in global markets after the US monetary policy decision.
The 30-share index surged 494.12 points or 0.86 per cent to 58,282.15 in the opening trade. Similarly, the Nifty rose 122.15 points or 0.71 per cent to 17,343.55. Infosys was the top gainer in the Sensex pack, rising over 2 per cent, followed by Bajaj Finance, HCL Tech, Tata Steel, Tech Mahindra and NTPC.
Last night, the US Federal Reserve said it would accelerate its pullback of economic stimulus and likely raise interest rates three times next year to tackle rising inflation.
“A hawkish Fed sending the markets higher is rare. But this happened on Wednesday in the US, since markets were positioned for a hawkish Fed, but hawkishness itself had positive market connotations,” said VK Vijayakumar, Chief investment Strategist at Geojit Financial Services.
Larger taper and three rate hikes of 25 bps each in 2022 are negative from market perspective, but the positive news is that the Fed expects inflation to cool off.
In India markets are positioned for volatility since the short-term texture of the market is sell on rally, dictated by relentless FII selling. This trend may persist for a few more days, he added.