Strong global markets spurred by Bank of England’s liquidity easing sent Indian stocks soaring as the Sensex rallied 364 points to close above 28,000, aided by auto, oil and financials. Global indices were pumped up by BoE’s decision to cut its key interest rate by 25 basis points to 0.25 per cent, its first reduction since 2009, and also start a fresh round of quantitative easing that had been on pause since 2012.
Because of Friday’s massive gains, domestic equities managed to end in the positive territory, with the Sensex and the Nifty advancing 26.49 points, or 0.09 per cent, and 44.65 points, or 0.51 per cent, respectively. Trading in the green throughout the day, the benchmark BSE Sensex added 363.98 points, or 1.31 per cent, to end at 28,078.35 after shuttling between 28,110.37 and 27,795.74. It had gained 16.86 points in Thursday’s choppy session.
This is the biggest single-session gain since July 11 when it had gained 499.79 points. Sentiment got a shot in the arm after the long-stalled indirect tax reform Goods and Services Tax (GST) Constitution Amendment Bill passed the Rajya Sabha muster on Wednesday and is likely to be tabled in the Lok Sabha on August 8.
There was more good news as Moody’s Investors Service on Thursday said the GST implementation will be positive for the country’s economic growth without any significant impact on inflation. The broader NSE Nifty retook the crucial 8,600-mark and hit a high of 8,689.40 before settling up by 132.05 points, or 1.54 per cent, at 8,683.15.
“It was a positive day on the bourses as the passage of the GST Bill got a thumbs-up from a global credit rating agency and a fresh round of liquidity easing in the United Kingdom lifted sentiment in global stock markets,” said Shreyash Devalkar, Fund Manager, Equities, BNP Paribas Mutual Fund.
Hero MotoCorp took the top slot by surging 5.02 per cent while Bajaj Auto climbed 4.38 per cent. Other major gainers were Axis Bank, Tata Motors, SBI, M&M, L&T and Adani Ports. A total of 23 scrips out of the 30-share Sensex pack ended higher. Among the BSE sectoral indices, auto rose the most by 3.14 per cent followed by oil and gas 2.74 per cent, metal 2.56 per cent, capital goods 2.34 per cent, PSU 2.17 per cent, banking 2.05 per cent and realty 2.04 per cent.
Foreign portfolio investors (FPIs) net bought shares worth Rs 559.49 crore yesterday, showed provisional data. Most Asian markets remained firm, with Hong Kong’s Hang Seng rising 1.44 per cent. Japan’s Nikkei ended steady. European indices advanced in early session after BoE’s announcement of the rate cut and a larger than expected stimulus package while investors waited for release of key US
non-farm payroll data.
London’s FTSE was up 0.40 per cent, Frankfurt’s DAX 30 added 0.20 per cent and Paris CAC gained 0.4 per cent. Broader markets added it up too, with the mid-cap and small-cap indices firming up 1.69 per cent and 1.47 per cent, respectively, on increased buying by investors.