For nearly a month the stock market has been waiting for the US Fed’s handling of interest rates on Sep 18. Now that it has happened and the rate has been reduced by 50 basis points, the market has erupted like a volcano.
Many records have been made today, the most important being the Sensex going past the 16,000 mark for the first time in its history to close at 16322. Nifty at 4732 closing is a shade low than the all-time high of 4739.
The breadth of the market has been phenomenal. Total turnover touched Rs.92,568 crore. The intra-day rally of 653 points for the Sensex has been the highest so far in its checkered history. This means the shorts have been mercilessly hammered into submission throughout the day.
While many champagne bottles will open this night, the euphoria is likely to last for a couple of days more before the reality sinks in. It’ll be then that the informed stock picking will start.
The market is at the crossroad. On one hand there is the chance of RBI too softening the interest rates. The other side is ranged with such mighty dark clouds like stronger rupee vis-à-vis dollar, burgeoning oil price, slowdown of industrial production, looming possibility of general elections, and so on.
What happens a month or 2 from now remains anybody’s guess. For now it’s celebration time both at the stock market and for the ensuing festivals.
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