Sensex shrugs off Fed taper, regains 21,000; rupee slips

Indian stock markets pushed higher in line with other global markets despite the announcement of Fed taper overnight.

The US Federal Reserve said it would reduce its monthly asset purchases by $10 billion to $75 billion, but it also indicated that its key interest rate would stay at rock bottom even longer than previously promised.

Analysts do not expect the Indian financial markets to react significantly to the tapering news due to Fed's dovish guidance.

The Sensex was up 157 points to 21,017 while Nifty rose 43 points to 6,260. The rupee was lower at 62.37  per dollar vs yesterday's close of 62.09.   

Taimur Baig of Deutsche Bank said he does not expect liquidity tightening due to the taper and the robust US data to support financial markets. He expects the rupee remain in the low-sixties against the dollar.

Phani Shekhar of Angel Broking said, "Assumption that yields will not go up despite the taper is keeping the markets cheerful. Prospects of bullish US growth also driving markets."

Asian markets were higher today after a record close on Wall Street.