5 factors that drove Sensex 500 points higher ahead of Interim Budget 2019

Interim Budget 2019:

Markets gained ground on Thursday with the S&P BSE Sensex rallying over 500 points, or around 1.5 per cent, in intra-day deals. On the National Stock Exchange (NSE), the Nifty50 moved up around 1.3 per cent, or 140 points, to hit an intra-day high of 10,813.
Here are five factors driving the markets:

Status quo by the US Federal Reserve: The US Federal Reserve held rates steady at the end of its two-day meeting, which ended Wednesday. The Federal Open Market Committee “will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate,” the central bank said in a statement Wednesday.

“FOMC statement and Powell’s press conference confirm our view that the Fed’s pause is, in reality, the end of the hiking cycle. We expect the Fed’s target range for the federal funds rate to remain unchanged for the remainder of the year, followed by rate cuts in 2020 as the economy starts to slide into a recession," said Philip Marey, senior market strategist at Rabobank International.

Supportive global cues: Asian stocks rose to a four-month high on Thursday after the US Federal Reserve pledged to be patient with further interest rate hikes, signalling a potential end to its tightening cycle amid signs of slowing global growth. MSCI's broadest index of Asia-Pacific shares outside Japan rose to its highest since October, while Japan's Nikkei moved up 1 per cent.


 Interim Budget & fiscal prudence: Finance minister Piyush Goyal will present the Interim Budget 2019 on Friday. Though markets expect the proposals to have a populist undertone ahead of general elections scheduled for April / May 2019, they do not expect the government to sway significantly from the path of fiscal prudence.