Equity benchmarks rebounded in early trade on Thursday, May 5, 2022 after falling sharply in prior trade, with the Sensex gaining 651 points after a sharp rise in US markets and the buy of major index Infosys.
The 30-part BSE benchmark traded 650.9 points higher at 56,319.93. The NSE Nifty was also up 185.65 points to 16,863.25.
From the Sensex package, the biggest gainers in early trading were Tech Mahindra, Tata Steel, Infosys, State Bank of India, Kotak Mahindra Bank and M&M.
In contrast, Nestle and Titan were the laggards.
Hong Kong markets traded higher.
U.S. stock markets rose in overnight trade on Wednesday.
The Federal Reserve stepped up its fight against the worst inflation in 40 years by raising its short-term interest rate by half a percentage point on Wednesday.
“US stocks rallied to post their biggest one-day gain since 2020 after comments from the Federal Reserve suggested the central bank is unlikely to consider a higher rate hike of 75 basis points in the coming months.
“Furthermore, the interest rate hike and the extent of the balance sheet liquidation went along the expected line without any negative surprises, which was already taken into account in the market correction of the last few days. It was sort of like a recovery rally,” said Mitul Shah, head of research at Reliance securities.
Meanwhile, domestic stock markets fell sharply on Wednesday after the RBI surprisingly hiked interest rates to 4.40 percent in a bid to curb inflation.
The BSE benchmark fell 1,306.96 points, or 2.29 percent, to 55,669.03 and the Nifty tanked 391.50 points, or 2.29 percent, to 16,677.60.
Meanwhile, international benchmark Brent oil rose 0.48 percent to $110.67 a barrel.
FIIs sell shares
According to stock market data, foreign institutional investors sold ₹3,288.18 crore of shares on Wednesday.
“US markets closed higher yesterday (Wednesday) after the Fed announced a 50 basis point rate hike. Jerome Powell said a 75 basis point hike is not something the committee is actively considering. That statement caused a market rally,” said Mohit Nigam, Head – PMS, Hem Securities.