$200 bn Fed lifeline may boost Indian markets
The surprise move by US Federal Reserve to lend up to $200 billion in treasury securities is likely to act as a booster for the Indian markets tomorrow. The bellwether Sensex rallied by 344 points from the day's low on Tuesday.
Buoyed by the Fed action, the US stocks rallied the most since January. The S&P 500 climbed 24.39 points, or 1.9 per cent to 1,297.76 at 10:13 am in New York. The Dow Jones Industrial Average added 238.86, or 2 per cent, to 11,979.01.
The Nasdaq Composite Index rose by 39.83 points, or 1.8 per cent to 2,209.17. Thirteen stocks gained against every one that fell on the New York Stock Exchange. The US stock futures rose following the Fed announcement, which came after the close of Indian markets.
With the key benchmark American indices reacting positively to the Fed action, the local markets can expect a strong rally tomorrow, according to analysts.
The Fed's move is intended to ease the gridlock in credit markets, which has cast its shadow on all global markets since late last year. The Fed plans to provide loans through auctions and increase swap lines with foreign central banks.
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