Sensex rises; exporters up on bets rupee would weaken after Fed

MUMBAI (Reuters) – The BSE Sensex rose on Thursday, led by gains in exporters such as Tata Consultancy Services(TCS.NS) on bets that the rupee would weaken after the U.S. Federal Reserve on Wednesday moved a step closer to raising interest rates.

The Fed committee chose to remove the promise it would be “patient in beginning to normalize the stance of monetary policy” but said it would raise rates when it feels “reasonably confident” that inflation will move toward its 2 percent goal over the medium term.

A rate hike by the Fed could force overseas investors, who have been the backbone of Indian shares’ record-setting rally so far, to cut positions.

Foreign portfolio investors have invested $ 5.4 billion so far this year, in addition to $ 16.1 billion in 2014, regulatory data showed.

“India is gaining tracking higher U.S shares but the risk of higher U.S. rates remains,” said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance, adding that it would be best not to rule out a decline in India alongside other emerging markets.

The benchmark BSE Sensex was up 0.7 percent, while the broader Nifty rose 0.63 percent.

Gains also tracked higher Asian shares which enjoyed their best session in 18 months on Thursday as investors priced in a later start and a slower pace for future U.S rate rises, slashing sovereign bond yields from Japan to Australia.

Exporters led gains. TCS rose 1.5 percent, while Wipro (WIPR.NS) advanced 1 percent.

Among pharmaceutical exporters, Sun Pharmaceutical Industries (SUN.NS) rose 1.5 percent and Lupin (LUPN.NS) gained 3.6 percent.

(Reporting by Abhishek Vishnoi; Editing by Subhranshu Sahu)

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