US Fed’s decision to continue with the easy-money policy and better-than-expected Q1 results from IT major Infosys kept the market tempo upbeat for the third straight week as both the key indices surged by over 2 per cent to end at nearly 6-week high.
The Bombay Stock Exchange 30-share barometer, S&P Sensex, resumed lower and dipped further to one-week low of 19,185.92 after positive US jobs data triggered concerns that the American central bank will slow the pace of its monetary stimulus later this year.
The market was also impacted after the rupee hit a record low of 61.21 to a dollar on possible winding down of the Fed’s $85 billion a month bond-buying programme.
However, a smart recovery in rupee amid steps taken by SEBI and Reserve Bank to curb speculative trade in currency derivatives and US Fed chief’s comments about continuing monetary incentive helped the Sensex to bounce back with a vengeance and end higher by 462.65 points, or 2.37 per cent, at 19,958.47, a level not seen since May 30.
In the last three weeks, the Sensex has zoomed by a staggering 1,184.23 points, or 6.31 per cent. The broad-based 50-issue CNX Nifty of the NSE zoomed by 141.10 points, or 2.40 per cent, to end at 6,009, also a 6-week high.
Trading sentiment was bolstered after Fed chief Ben Bernanke on Wednesday signalled that the monetary stimulus would continue for some time, boosting the prospects of fund flows to the emerging markets, including India, brokers said.
The bond-buying programme, which has flooded global markets with liquidity, has helped support an array of assets, including equities.