Robust GDP data for the December quarter allayed market fears as the Sensex today rallied over 241 points to end at about a six-month high of 28,985 amid firm global cues. The impact was such that even the broader NSE Nifty took back the 8,900-mark.
The Central Statistic Office yesterday showed that GDP expanded by 7 per cent in the third quarter, belying all fears of the note ban derailing economic activity. It also retained its first advance growth estimate for the fiscal at 7.1 per cent. The Sensex took off on a positive note and went past the key 29,000-mark to touch a high of 29,029.17 before settling up by 241.17 points, or 0.84 per cent, at 28,984.49, a level last seen on September 8 last year when it had closed at 29,045.28.
The gauge had lost 149.65 points in the previous two sessions. The NSE Nifty also moved up 66.20 points, or 0.75 per cent, to 8,945.80 after shuttling between 8,960.80 and 8,898.60. A monthly PMI survey showed that India's manufacturing sector grew for the second straight month in February. Meanwhile, US President Donald Trump, in his address to the Congress, took a more measured tone, saying he is open to immigration reforms. Moody’s Investors Service said demonetisation will be credit positive for India as it is likely to reduce tax avoidance and corruption, which cheered market players.
“A surprise growth of 7.1 per cent in third quarter GDP data and no negative comments in Trump’s speech have given a renewed buying interest in the market. The impact of cash crunch seems over-estimated. Prima facie, the February auto sales numbers are looking better as discretionary spending is gradually picking up,” said Vinod Nair, Head of Research, Geojit Financial Services.