With a positive hope on the announcements on the Government’s much-awaited Goods and Service Tax (GST) mathematics to decide on rates and slabs of the indirect tax, market remained bullish throughout the trading session. The benchmark Sensex reclaimed the 28,000-mark on Tuesday, zooming 521 points - the biggest single-day gain in nearly five months. The Nifty also crossed 8,600-level after two weeks of tepid start in the bourses.
Market experts said investors were markedly optimistic in anticipation of positive announcements on the GST front as the GST Council meeting got under way to decide on rates and slabs of the indirect tax, due to be rolled out from April 1 next year. “Besides, there are expectations that inflation will stay in the RBI comfort zone, which will usher in lower borrowing costs,” they said.
Banking stocks also stole the show on Dalal Street as private lender ICICI Bank zoomed 4.58 per cent, followed by Axis Bank 2.59 per cent, HDFC Bank 1.58 per cent. While the largest public sector bank, State Bank of India (SBI) gained almost 1.50 per cent in the bourse. The second-line stocks too witnessed heavy buying, lifting the mid-cap index by 1.89 per cent and small-cap by 1.30 per cent. “After the Essar-Rosneft deal, there is a positive hope among investors that the non performing asset (NPA) issue faced by almost all banks will be resolved,” experts said.
The rupee recovering against the dollar too had a positive impact. “Global indices trended up after an unexpected fall in US manufacturing index tempered hopes of an interest rate hike by the Federal Reserve,” they said.
The 30-share BSE Sensex resumed higher and quickly crossed the 28,000-mark to hit a high of 28,064.39 before settling at 28,050.88, a significant gain of 520.91, or 1.89 per cent. This was the biggest single-day gain since May 25 when it had gained 575.70 points.
Market experts further said that bargaining opportunity perhaps consolidated investors’ sentiment to remain in buying mood throughout the trading session. “The market bounced back led by short covering on the starting day of the GST council. Market sensed a bargaining opportunity due to the correction which has happened in the last two weeks while the outcome from the event is likely to be positive,” said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.
The gauge had lost 143.63 points, spooked by tepid start to second quarterly earnings and a lacklustre global trend. The NSE Nifty retook the 8,600-mark to touch a high of 8,659.80 and finally settled up 157.50 points, or 1.85 per cent, at 8,677.90. In the process, both the Sensex and the Nifty recorded their biggest single-day gain in nearly five months.
Among sectoral indices, the banking index topped the chart by climbing 2.37 per cent followed by capital goods 2.07 per cent, IT 1.84 per cent, metal 1.82 per cent and technology 1.68 per cent. Out of the 30-share Sensex pack, 28 scrips ended with gains while ONGC and Asian Paint registered losses.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 456.64 crore on Monday, showed provisional data. Elsewhere, other Asian markets also ended higher with Japan’s Nikkei up 0.38 per cent, Hong Kong’s Hang Seng 1.55 per cent and Shanghai Composite 1.40 per cent. European markets also opened on a positive note, tracking gains in Asian trading amid a slide in the US dollar ahead of US inflation data. london’s FTSE, Paris CAC 40 and Frankfurt’s DAX 30 all gained up to 1.21 per cent in their early deals.
The US stocks registered small losses on Monday amid falling oil prices as investors digested a number of corporate results, key economic data and remarks from a key Federal Reserve official. The market breadth turned positive as 1,905 stocks ended in green, 926 closed in the red while 206 ruled steady. The total turnover on BSE amounted to Rs 3,703.61 crore, lower than turnover of Rs 3,884.29 crore registered during the previous trading session.