Indian shares soar on Fed rate cut amid fluctuations
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Indian shares soar on Fed rate cut amid fluctuations

Thursday, 24 January 2008, 13:31 Hrs
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New Delhi: A key Indian share market index soared over 6.5 percent Wednesday after the US Federal Reserve made a surprise move and cut its interest rates to cushion the crisis rocking the financial system across the globe.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opened higher at 17,415.26 points, with a gain of 685.32 points, over the previous day's close at 16,729.94 points.

By 2 p.m., the barometer index was ruling at 17,731.09 points, compared to the previous day's close at 16,729.94 points, to register a gain of 1,001.15 points, or 5.98 percent.

At noon, the index was ruling at 17,311.97 points, with a gain of 582.03 points, or 3.48 percent, data with the bourse showed. All sector-specific indices were also ruling higher.

Yet lingering uncertainty in the financial world over possible recession in the US saw the key index fluctuate wildly in a range of 1,267.17 points as investors tried to book profits at every small rise, analysts said.

The sector-specific index for realty stocks led the upswing, followed by those for power, oil and gas, state-run units, banking metals, information technology, tech and automobiles.

Among specific stocks in the Sensex basket, Reliance Energy led the gainers, followed by Satyam Computer, Bharat Heavy Electricals, NTPC, Tata Consultancy, Bajaj Auto, Reliance Communications, DLF and Hindustan Aluminium.

Monday and Tuesday saw the barometer plummet 1,408.35 points, or 7.41 percent, and 875.41 points, or 4.97 percent, on account of panic selling, in line with the movements across the globe from Tokyo to New York.

The authorities at the Mumbai bourse had to suspend trading for an hour Tuesday, as Sensex fell below the circuit breaker level, before a pep talk from Finance Minister P. Chidambaram on the fundamentally strong Indian economy helped ease the losses.

Investors had lost $170 billion Monday in terms of market capitalisation, with another $95 billion shaved off the valuations the next day as scrip after scrip lost ground on account of panic selling.

Stung by fears of a possible recession, The US Federal Reserve had delivered a surprise interest rate cut of 75 basis points early Tuesday, which shored up market confidence across the globe, including India.
Source: IANS
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