Sensex soars to regain 26,000 amid hopes of RBI rate cut - BSE Sensex and Nifty gained in global markets on Thursday, with Sensex rising as much as 455 points at its day's high of 26,170.39 while Nifty hit 7,930.80. A higher trading rupee also lifted the sentiment.
Analysts say the possibility of a rate cut from the Reserve Bank of India (RBI) brightened. The RBI's next policy review meet is scheduled for September 29.
A rate hike from the US could trigger outflows from emerging markets, leading to more turmoil in global financial markets.
RBI Governor Raghuram Rajan on Monday said interest rate cuts should only be delivered after sustained low inflation and not as "goodies" doled out after public pleading.
Analysts say consumer inflation, at 3.78 per cent, is likely to remain below RBI's year-end target of 6 per cent, due to falling global commodity prices, particularly oil.
The Dow Jones industrial average surged 3.95 per cent higher at 16,285.51. Its gain of 619.07 points was its biggest since 2008.
Worry over China's economic health sent Stock markets tumbling globally but some calm returned after Beijing rolled out strong policy easing steps late on Tuesday.
China markets were also higher today with benchmark index Shanghai Composite trading nearly 3 per cent higher.
Analysts say that without an ease in selling pressure from foreign institutional investors, who own nearly 25 per cent of BSE 200 stocks, Indian markets are unlikely to gain a steady footing.
Domestic investors, who bought stocks worth Rs 1881.08 crore on Wednesday have been of some support to Sensex and Nifty as Foreign investors sold Indian shares worth Rs 2345.77 crore taking their total selling to nearly Rs 13,500 crore in the previous five sessions.
Dalal Street however is likely to remain choppy today as derivatives for the August series expire today. At 12:07 p.m., the Sensex was up nearly 300 points to 26,009 while Nifty rose 99 points to 7,890.