Mumbai: Buoyed by status quo stance taken by the US Fed on interest rate and optimism over trade ties with China helped both the key indices, Sensex and Nifty, to wash out initial sharp losses and land in positive terrain at close for the six week in a row.
Higher global cues triggered by stand taken by US Fed to keep interest rate unchanged and also boosted the market sentiment.
The S&P BSE benchmark Sensex resumed lower and dropped further to a low of 26,464.03 on heavy heavy profit-booking from operators in view of setback of BJP in by-poll elections and fears of hike in interest rates by Federal Reserve.
However, it bounced back to a high of 27,247.17 on buying as Fed's promised to retain rates at low levels and rising optimism over trade ties with China before concluding the week at 27,090.42, showing a gain of 29.38 points or 0.11 percent.
The Sensex has gained 1,761.28 points or 6.98 percent in the six weeks.
The NSE 50-share Nifty also moved up by 15.95 points or 0.20 percent to regain 8,100-mark to end at 8,121.45.
In a statement, the US Federal Reserve Chairwoman Janet Yellen Wednesday in its policy setting meeting promised to keep the interest rates near zero for a "considerable time after its bonds buying programme comes to an end in October, giving immediate relief to the emerging markets, including India as fears of immediate capital outflows have subsided.
India Wednesday signed a 5-year trade and economic co-operation agreement with China with a view to improve the trade balance and obtain USD 20 billion Chinese investments.
IT, teck, pharma, realty and auto shares attracted good buying support while refinery, metal PSU and capital goods counters suffered with losses.
The Sensex, however, resumed the week on a bearish note on US rate hike fears amid tepid China data, despite domestic inflation, Wholesale Price Index (WPI) in August easing to nearly five-year low and rupee depreciating to one-month low.
Wary operators preferred to book profits at initial stages as they hoped early hike in interest rates by the US Federal Reserve. Higher US rates was likely to trigger capital outflows in emerging markets, including India.
Market since Wednesday got a jerk on speculation that Fed would maintain its interest rates low and boost growth for now and reports said the People's Bank of China would inject 500 billion yuan into the five top state-owned banks, with a view to boosting lending to businesses, keeping equity and commodities markets globally upbeat.
Oil Marketing Companies (OMCs) were at the receiving end on speculation fuel prices will not be touched till Maharashtra and Haryana elections are over.
Metal shares also suffered heavy losses after lacklustre Chinese factory output indicated slowdown in world's second biggest economy.
Participants were truly excited by the prospects of huge investments by China in India's infrastructure, railway & manufacturing projects, according to Devang Mehta, Sr. VP & Head - Equity Advisory, Anand Rathi Financial Services.
Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth a net of Rs 74.33 crs during the week as per the SEBI's record, including provisional figure of Sept 19.
Jignesh Chaudhary, Head of Research, Veracity Broking Services, said, "The Indian equity markets started on negative note, despite fall in WPI inflation on the first day next day also it observed some correction.
"The markets got boost on Wednesday after the improving relations of India and China in which China decided to Invest huge sum in India. The US Fed meet on monetary policy was the most dominant issue in the current week but Fed kept the rate unchanged for considerable time, giving boost to the international markets."
"FIIs have been the most important contributors to the Indian Market. They have been in LONG position for the index as told by the local traders. The Economic Calendar is going to be active for US Economy in the coming trading week as there are some major data release scheduled ahead, GDP Home Sales, and Durable goods order and all the data are expected to improve than the previous data release so this would certainly affect the market and react accordingly. In the coming trading week, the trading technicals are suggesting that the markets would be in positive trend," he added.
Major gainers from the sensex pack were Dr Reddy's Lab (8.69 percent), Hero Motocorp (7.04 percent), TCS (3.92 percent) Maruti (3.83 percent), BHEL (2.86 percent), Bajaj Auto (2.74 percent), Hindalco (2.55 percent), Cipla (2.49 percent) and Wipro (2.07 percent) while ONGC fell by 5.63 percent, Coal India 3.38 percent, Gail India 2.77 percent, Larsen 2.76 percent, HUL 2.57 percent, SSLT 2.38 percent, Axis Bank 2.25 percent, SBI 2.17 percent, RIL 2.08 percent and Tata Steel 1.29 percent.
Among the S&P BSE sectoral indices, IT rose by 2.26 percent followed by Teck 2.12 percent, HC 1.41 percent, Realty 0.94 percent and Auto 0.92 percent while Oil&Gas fell by 3.05 percent, Metal 3.00 percent and CG 1.92 percent.
The total turnover at BSE and NSE rose to Rs 20,581.37 crs and Rs 92,300.19 crs during the week from Rs 17,622.54 crs and Rs 87,565.31 crs last week.
