Sensex jumps 629 pts on end of poll results’ uncertainty, new RBI Governor appointmenthttps://indianexpress.com/article/business/market/sensex-jumps-over-300-points-after-appointment-of-new-rbi-governor-rupee-falls-32-paise-against-us-dollar-5489559/

Sensex jumps 629 pts on end of poll results’ uncertainty, new RBI Governor appointment

Shaktikanta Das was Tuesday named the new governor of the Reserve Bank of India.

While the Sensex closed 629 points higher to 35,779.07, Nifty gained 188 points to 10,737 on heavy buying support.
While the Sensex closed 629 points higher to 35,779.07, Nifty gained 188 points to 10,737 on heavy buying support.

Stock markets on Wednesday staged a smart rally as the uncertainty related to the results of assembly elections in five states ended and the government moved quickly to appoint Shaktikanta Das as the Reserve Bank of India Governor. While the Sensex closed 629 points higher to 35,779.07, Nifty gained 188 points to 10,737 on heavy buying support.

The rupee, however, declined by 16 paise to close at 72.01 against the US dollar in the wake of the strengthening of the US greenback and rising crude oil prices. According to analysts, markets are expecting higher spending in agriculture-related activities by the newly formed state governments in Chhattisgarh, Madhya Pradesh and Rajasthan to fulfil their electoral promises. Besides, markets are also expecting more measures from the NDA government to address farmers’ concerns ahead of the Lok Sabha elections.

“Investors welcomed the quick appointment of the central bank governor who’s expected to shift away from a hawkish view,” said an analyst. Markets expect the appointment of Shaktikanta Das as the Reserve Bank of India Governor to address contentious issues emerging from the sudden resignation of Urjit Patel. “This will ensure continuity in monetary policy making and regulatory measures even as the global economy is passing through uncertain times. The financial markets will also significantly benefit from the appointment of Das given his rich prior experience in fiscal policies and trade. This will also ensure a convergence of domestic and external policies,” SBI Chairman Rajnish Kumar said. Essel Mutual Fund CIO Viral Berawala, said, “following the setback in the state elections, markets are expecting rural-focused policies over the next few months. Also, the base metal prices went up accompanied by a strengthening currency, helping metal stocks to do well.”

“Bulls continued to dominate as the equity benchmark indices registered second straight session of healthy gains, largely led by strong global cues and on easing tensions post the announcement of appointment of new RBI governor,” said Jayant Manglik, President, Religare Broking. The Nifty index opened in the green and continued to gain strength throughout the session before closing 1.8 per cent higher at 10,738. The broader market indices — Midcap and Smallcap — outperformed the benchmark, closing with strong gains of 2.5 per cent each.

Broad based buying was witnessed across the sectors with realty, auto, metals, capital goods, banks, oil & gas and power being the top gainers, up 2-4 per cent. Globally, both Asian and European markets traded sharply higher.

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“Considering a sharp rally in the last two sessions, some consolidation cannot be ruled out at higher levels. Domestic macro data like October IIP, November CPI and WPI inflation, movement of crude oil price, currency and global developments, especially on the US-China trade front will dictate the market trend in the coming sessions,” he said.