Market may surge after US Fed lowers interest rates

After the announcement of interest rate cuts by Fed chief the US markets rallied sharply and tracking the same currently Asian markets are also up over 2-3%. However, investors should remain cautious as intra-day volatility remains the major concern. Among the domestic indices, the Nifty could test higher levels of 4580 and may dip to 4520 on the downside. The Sensex has a likely support at 14900 and may face resistance at 15850.

Major US indices rallied sharply on Tuesday, after the Federal Reserve cut a key short-term interest rate by a half-percentage point, reassuring investors that it was taking aggressive action amid the credit and mortgage market meltdown. While the Dow Jones registered biggest one day gain was up by 336 points at 13739, the Nasdaq jumped by 70 points to close at 2652.

All the Indian ADRs traded firm on the US bourses. VSNL led the pack with gains of over 7.81% followed by Patni Computer and HDFC Bank gaining over 7%, while Infosys, Satyam, Wipro, Dr Reddy's Lab, Tata Motors, ICICI Bank and MTNL jumped over 1-5% each.

Crude oil prices rose on Tuesday, with the Nymex light crude oil for October delivery gaining 94 cents to close at $81.51 a barrel. In the commodity space, the Comex gold for December delivery slipped by 10 cents to settle at $723.70 an ounce.