Bulls return as Fed rate pause, dip in US yields lift sentiment

Indian equities experienced a broad-based recovery on Thursday, with the Sensex surging 905 points and the Nifty surpassing 22,900, following a Federal Reserve decision to keep interest rates unchanged. This marked a retreat in US yields, which offered some relief to markets. However, uncertainty surrounding global interest rates continued to cast a shadow over investor sentiment.

The 30-share BSE Sensex climbed 905.01 points, or 1.24%, to close at 74,151.04, while the NSE Nifty rose 237.90 points, or 1.05%, to reach 22,936.75. Following a previous session's weakness, this rebound was fueled by buying activity across sectors, particularly in banking, financial services, and heavyweight stocks. Most sectoral indices, except auto, recorded gains, with Nifty Bank, Media, Infrastructure, PSU Bank, Private Bank, and Energy indices each up around 1%.

IT, Consumer Durables, Metal, Oil & Gas, and Realty indices also saw increases of over 0.5%. Sunny Agrawal, head of fundamental research at SBI Securities, attributed the gains to buying in large-cap stocks and the strength of rate-sensitive sectors. However, crude oil prices above $110 a barrel remain a significant macroeconomic risk for import-dependent economies like India.

Technical analysis suggested that the Nifty's move above the 20-day exponential moving average offered near-term relief and improved prospects of advancing towards 23,100-23,300.