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Stock markets and the rupee rallied on Wednesday amid indications the Monsoon is strengthening and optimism the government will unveil steps in next week’s budget to bring the economy back on the growth path.
The BSE Sensex intra-day hit life high of 25,864.53 and settled at a new peak of 25,841.21, gaining 324.86 points, or 1.27 per cent — extending its string of gains to fourth day. The broad-based 50-issue CNX Nifty of the NSE flared up by 90.45 points, or 1.18 per cent, to log its new closing peak of 7,725.15. It touched an intra-day peak of 7,732.40.
The rupee gained 38 paise — its biggest single-day rise in seven weeks — to close at 59.69 against the US dollar on growing optimism about the budget measures.
The yield on the 8.83 per cent government bond due November 2023 fell eight basis points, or 0.08 percentage point, to 8.66 per cent in the money market. Reports about signs of a revival in rains also boosted markets as it would calm inflation expectations.
Amar Ambani, head of research, IIFL, said, “It was a fantastic trading session as key indices ended at fresh life-time highs in anticipation of bold policies to be announced in the Budget.”
“Markets ended higher on expectations of a reforms-oriented budget. Going ahead, we see the Monsoon progress and the Budget to be the two most important triggers,” said Dipen Shah, Head- Private Client Group Research, Kotak Securities.
