Firm global cues: Sensex jumps over 200 pts to breach 25,900 in early trade

Key equity benchmark indices made a firm start early Wednesday trade, reciprocating the buoyancy in other global markets. The benchmark Sensex edged past the 25,900-mark even as investors worldwide, including India, keenly await the two-day US Fed meet starting later today that is more or less expected to press for the first interest rate hike in a decade.

At 10.10 am, the 30-share BSE S&P Sensex was at 25,875.50, up 169.57 points, or 0.7 percent from previous close.

A short while ago, the index jumped 216 points to touch a high of 25,922. The broader 50-stocks CNX Nifty was at 7,872.15, up 43.05 points, or 0.6 percent.

Market breadth was positive with 1,179 stocks advancing against 500 declines on BSE.

Overnight, key US gauges ended over 1 percent higher ahead of the crucial Fed meeting. Major Asian gauges - Japan’s Nikkei & Chinese indices Hang Seng & Shanghai Composite - also followed suit today and were up over a percent each.

In the run-up to the US Fed meet, markets experts across the globe are divided in their opinion over the much-hyped policy rate hike plans.

G Chokkalingam, founder & managing director, Equinomics Research & Advisory, feels the Fed may not hike the rates aggressively in one go as US policy makers had recently highlighted the need to consider the state of other economies before making any major policy changes.

“When most currencies of the emerging markets have crashed and many economies are contracting, it is highly doubtful if US can afford to hike the rates aggressively at this juncture,” said Chokkalingam.

A rise in market expectations for US interest rates as the Federal Reserve starts to normalize policy could cut capital inflows to emerging markets by as much as 45%, World Bank economists said in a paper published on Tuesday.

In accordance with broad market optimism, several Sensex-based stocks clocked decent gains in early trade.

Shares of HeroMoto Corp rose nearly 3 percent to Rs 2,378, Sun Pharma gained 2.6 percent to Rs 889, Bajaj Auto moved up 2.1 percent to Rs 2,343, Vedanta added 1.9 percent to Rs 98.70 and Lupin was up 1.7 percent at Rs 1,863.45.

Other gainers such as Wipro, Axis Bank, Cipla, SBI, ICICI Bank, Bharti Airtel, Gail, HDFC and ITC were up around 1-1.5 percent.