Mumbai: Thanks to the US Federal Reserve, it took only one session for India’s stocks to wipe away the month’s losses.
The S&P BSE Sensex rose 1.9 per cent on Thursday, its biggest advance in three months, to 36,256.69 in Mumbai on the expiry day of monthly derivatives contracts. The rally helped the gauge end January with a 0.5 per cent gain. The NSE Nifty 50 Index added 1.7 per cent.
The US central bank’s decision to put interest rate increases on hold raised investor optimism that capital flows to emerging markets will resume. Stocks across Asia surged after the dovish statement helped ease concern that policymakers would carry out plans to raise interest rates, despite data suggesting the world’s largest economy is cooling.
At home, Prime Minister Narendra Modi will have a last chance to win over voters ahead of a national poll, with possible populist spending measures as his government presents the last federal budget of its term on Friday. Speculation is rife that Modi’s fiscal plan includes a cash transfer programme for farmers entailing additional spending of 700 billion rupees ($9.8 billion), support for small businesses and some reprieve for taxpayers.