After four consecutive sessions of falls, stock markets on Wednesday jumped 1.25 per cent as investors became hopeful Parliament will approve a revamped goods and services tax (GST) in the upcoming monsoon session.
Even though the sentiment was broadly cautious ahead of the US Federal Reserve’s policy decision on Wednesday and Britain’s Brexit referendum next week, investors also cheered the State Bank of India merger approval and the new aviation policy.
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The BSE Sensex opened strong and hovered between 26,752.59 and 26,446.59 before closing at 26,726.34, showing a gain of 330.63 points or 1.25 per cent. The benchmark had lost 625 points in the previous four sessions. The 50-issue NSE Nifty surged 97.75 points or 1.21 per cent to end above the crucial 8,200-level at 8,206.60.
The rupee also snapped its last 4-day losing streak against the US currency and recovered 12 paise to close at 67.15 per dollar on hopes of foreign capital inflows.
“The market rallied after four consecutive days of downturn, tracking the positive global markets and development over GST. Global markets are witnessing a rebound ahead of the US Fed outcome which concludes on Wednesday, with expectations for no rate hike. Positive signs over GST consensus is adding optimism on the domestic front,” said Vinod Nair, head of Research, Geojit BNP Paribas Financial Services.
“In overseas stock markets, European stocks edged higher ahead of the US Fed outcome. Chinese markets rose, shrugging off a decision by stock index provider MSCI to delay inclusion of mainland-traded Chinese A shares in its key emerging market index,” said Shreyash Devalkar, Fund Manager, BNP Paribas Mutual Fund.