In the previous five trading sessions, the domestic markets
had hit a downward slope on concerns over weak corporate fundamentals and the late arrival of the monsoon. In addition, India’s decision to slap higher retaliatory tariffs on 28 US products had triggered trade war concerns.
“Indian markets have been falling continuously for the last several days. A rally was due, and the Fed’s statement came as an excuse,” said Shankar Sharma, founder and chief global strategist, First Global.
“Today was just a relief rally. Going forward, corporate fundamentals will be the sole determinant of market direction. One can’t expect huge buoyancy unless there is significant revival in earnings,” he added. The Fed action will boost liquidity in emerging markets. However, the shift in policy stance is with the objective to tackle growing economic risks. Foreign portfolio investors sold shares worth Rs 438 crore on Thursday, while domestic investors were buyers to the tune of Rs 1,241 crore, showed provisional data by the exchanges.