India joined the global stock rally after the US Federal Reserve cut interest rates, a move that sent investors into a frenzied buying spree from Wall Street to Dalal Street. With bulls charging into action, the benchmark Sensex surged 654 points, or 4.17 per cent, to close at 16,322.75 — registering the biggest single-day point gain in the Sensex.

Market capitalisation — investors’ wealth — surged by Rs 153,000 crore to Rs 49.16 lakh crore.

Shares across the board participated in the rally triggered after the US Federal Reserve announced a higher-than-expected 50 basis points-cut in the Fed funds rate to 4.75 per cent from 5.25 per cent on Tuesday, easing concerns about the housing slump and the credit market turmoil driving the world’s largest economy into recession.

Prior to this, the US Fed had hiked rates for 17 consecutive times in the span of four years.

A buying euphoria was witnessed across the world markets. Tracking overnight gains on Wall Street, Hong Kong’s Hang Seng (up 3.98 per cent), Japan’s Nikkei (up 3.67 per cent), Singapore’s Straits Times (up 3.65 per cent) and South Korea’s Seoul Composite (up 3.48 per cent) surged. Dow Jones industrial average soared 2.51 per cent on Tuesday. This was its biggest surge since April 2, 2003.

The Sensex surged with high turnover: it opened with a bang and kept on advancing during the course of the trading session as buying continued for index pivotals. Short covering also propelled the market higher to some extent. “The Fed cut along with control over inflation and an improved political situation has helped boost the market enthusiasm. A look at some of the advance tax figures also suggest that quarterly numbers of corporates are likely to be healthy.

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