Japan rate cut boosts Sensex

The equity markets bounced back on Friday and posted their first weekly gains in this year supported by a strong rally in global stocks after the Bank of Japan (BoJ) surprised investors by slashing its benchmark interest rate below zero to stimulate its economy.

A rally in global crude oil prices, further stimulus measures announced by China’s central bank and a recovery in Indian rupee against the US dollar also helped the markets to maintain their winning momentum. The Sensex climbed 401.12 points to end the day at 24,870.69 while the Nifty ended the day at 7,563.55, gaining 138.90 points.

Market participants said that the unexpected rate cut by BOJ, which led to a recovery in global stocks triggered short covering on the domestic bourses.

Meanwhile, the Chinese central bank’s decision to pump in an additional $15.21 billion into the financial system through an extra money market operation to lift its slowing economy, also had a positive impact on market sentiments.

Foreign portfolio investors turned net buyers of Indian equities on Friday after selling about Rs 10,000 crore during this month.

“The markets surged to a two-week high from a sluggish terrain due to the BoJ’s surprise rate cut by 20 basis points to negative 0.1 per cent, which is expected to stimulate global growth. Moreover, we are witnessing a growing participation in mid-cap stocks due to continued investment from domestic institutional inves-tors,” said Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services. The broader market also remained strong with 1,556 stocks traded on the Bombay Stock Exchange (BSE) ending the day higher as compared to 1,035 stocks that declined.