Snapping the three-day losing streak, stock markets on Monday rallied as the Reserve Bank of India announced measures to shore up liquidity and the government pressed for a change of management at the crisis-hit IL&FS. The 30-share BSE Sensex soared 299 points in see-saw trade to close at 36,526.14, while the NSE Nifty jumped 77.85 points to reclaim the 11,000-mark.
However, the rupee plunged 43 paise to end at a near two-week low of 72.91 against the US dollar Monday amid a strengthening greenback and steady capital outflows. Higher US Treasury yields, which rose above the 3 per cent mark, boosted the appeal for the dollar.
Bandhan Bank shares plunged by 20 per cent to Rs 451.20 after the RBI barred the bank from opening new branches and also ordered freezing of remuneration of its MD and CEO Chandra Shekhar Ghosh over the bank’s failure to adhere to the RBI’s bank licensing regulations.
Analysts said positive manufacturing PMI data for September and healthy auto sales numbers also reassured investors. Yes Bank was the top gainer in the Sensex pack, spurting 9.86 per cent. Shares of IL&FS group companies surged up to 20 per cent Monday after the government moved the National Company Law Tribunal (NCLT) for change of management at the crisis-hit firm.
The Reserve Bank on Monday announced that it will inject Rs 36,000 crore liquidity into the system through purchase of government bonds in October to meet the festival season demand for funds.
The Sensex opened on a strong note at 36,274.25 but soon declined due to concerns surrounding the NBFC space and the commercial paper market. However, it recovered in afternoon trade to touch a high of 36,616.64, before finally closing higher by 299.00 points, or 0.83 per cent, at 36,526.14. The NSE Nifty gained 77.85 points, or 0.71 per cent, to finish at 11,008.30. Intra-day, it shuttled between 10,821.55 and 11,035.65.
“Market rebounded after a weak start with short covering in banking stocks after recent correction and a positive global market. The new trade deal between US and Canada eased trade war concerns and will stimulate sentiment,” said Vinod Nair, Head of Research, Geojit Financial Services. India’s manufacturing sector activity improved in September amid gains in new orders, output and employment, a monthly survey said Monday. The Nikkei India Manufacturing Purchasing Managers’ Index strengthened slightly in September to 52.2, up from 51.7 in August, as sales rose from both domestic as well as foreign clients.