MUMBAI: The Sensex rallied by 491 points to close at 71,848 on Thursday driven by foreign fund buying despite a weak overnight close for Wall Street stocks. Banking & financial stocks contributed the most to the day’s gain in Sensex stocks. Minutes of the US Fed’s last meeting indicating two-three rate cuts in 2024 cheered local investors, said Prashanth Tapse of Mehta Equities. As a result, the domestic market rebounded from its two-day fall, led by a rally in real estate stocks.

“China, currently undergoing a slowdown phase, has turned out to be a major succor for Indian markets, which continues to attract robust foreign fund flows and domestic inflows. With economic activity remaining buoyant, expectations of a healthy corporate earnings announcement could keep the mood upbeat going ahead,” Tapse said in a note to clients.

The minutes of Fed’s meeting showed that members saw lower inflation risks in the coming months in the world’s largest economy. They were also concerned about ‘overly restrictive’ policy that could harm the economy. Since early 2022, when the US Fed started raising rates to tame inflation and cool down a hot labor market, there have been talks about an impending recession that continued through 2023. Lately, there have been talks about a soft landing for the US economy, which means it would avoid recession, reports said.

During Thursday’s session, foreign funds led the rally with a net buying figure of Rs 1,513 crore, while domestic institutions were net sellers at Rs 1,387 crore, BSE data showed. The day’s sessions also made investors richer by Rs 3.2 lakh crore with BSE’s market capitalisation now at almost Rs 375 lakh crore, official data showed.