Bulls staged a strong comeback on Tuesday as GST council meet kick started. The Sensex surged more than 500 points to surpass psychological 28000-mark, driven by global cues. Short covering and value buying in index heavyweights also lifted the market sentiment.
The 30-share BSE Sensex was up 520.91 points or 1.89 percent at 28050.88 and the 50-share NSE Nifty jumped 157.50 points or 1.85 percent to 8677.90. The broader markets also traded in line with benchmarks as the BSE Midcap rallied 1.9 percent on strong breadth. About 1903 shares advanced against 930 declining shares on the exchange.
Outcome from the GST event is likely to be positive; the market expects that the government will arrive at a consensus on the GST rate and provide a support to the trend, Vinod Nair of Geojit BNP Paribas Financial Services says.
“On a global scale, India is holding up pretty well,” Rob Subbaraman of Nomura says, referring to the economy’s growth. In near-term, he expects inflation to go down and consumer price index to fall below 4 percent.
European stocks were higher with the France’s CAC, Germany’s DAX and Britain’s FTSE rising 1 percent each as firming oil prices lifted global sentiment. Asian markets ended higher with the China’s Shanghai rising 1.4 percent and Hong Kong’s Hang Seng 1.55 percent. Crude oil prices were 1 percent higher, at the time of writing this article.
On home turf, ICICI Bank extended rally for the second consecutive session, up 4.6 percent in addition to 7 percent jump in yesterday’s trade. While maintaining a buy call on the stock, Nomura raised target price from Rs 285 to Rs 325 per share, saying it remained preferred corporate bank. The sharp upside in previous session was on hopes of repayment of loan from Essar Group after Essar Oil-Rosneft deal.
Housing finance company HDFC was the biggest contributor to Sensex’s gain, up 3.82 percent followed by ITC, HDFC Bank, L&T, Reliance Industries, Infosys and Axis Bank with 1.5-3 percent upside. Adani Ports was the biggest gainer, up 6.3 percent whereas ONGC and Asian Paints were only losers among Sensex 30 stocks.
More to come….