Stock markets on Friday rallied smartly on expectations of more measures from the government to prop up the auto sector and the bullish fervour on global markets amid easing trade tensions between the US and China.
The 30-share BSE Sensex vaulted 337.35 points, or 0.92 per cent, higher at 36,981.77. The broader NSE Nifty spurted 98.30 points, or 0.91 per cent, to finish at 10,946.20.
Even as the auto industry players clamoured for a GST rate cut, Minister of State for Finance Anurag Thakur on Friday assured all support from the Centre. Road Transport Minister Nitin Gadkari has also assured the crisis-hit automobile sector of all possible support from the government, including taking up the demand of GST reduction with Finance Minister Nirmala Sitharaman.
“Expectation of sops to the falling auto sector lifted market sentiments today, while gain across Asian markets on a hope of ease in trade tension supported the upside.
Continuous selling by FIIs remained as a concern, but market may trade positively in the short-term in anticipation of policy actions,” said Vinod Nair, head of research, Geojit Financial Services.
During the holiday-truncated week, the Sensex lost 351 points or 0.94 per cent, while the Nifty shed 77.05 points or 0.69 per cent. Stocks around the world mostly rallied on Thursday after the US and China agreed to meet soon to resume trade talks. That news sparked optimism that the two sides could work toward breaking the stalemate in negotiations.
Meanwhile, the Indian rupee appreciated 12 paise to trade at 71.72 per US dollar due to firm stock markets and capital inflows..
Auto stocks ended in the green. Maruti Suzuki soared 3.61 per cent, Bajaj Auto 2.90 per cent, Tata Motors 2.58 per cent, Mahindra and Mahindra 2.34 per cent and Hero MotoCorp (2.14 per cent). Sectorally, BSE auto, power, metal, utilities, energy, bankex, consumer durables and finance indices gained up to 2.54 per cent. However, realty and FMCG indices ended in the red. Broader BSE midcap and smallcap indices followed the benchmarks to settle up to 0.79 per cent higher.
Deepak Jasani, head retail research, HDFC Securities, said, “markets rallied sharply on Friday after taking a breather in the previous session. The indices clocked their best gains of the week, but ended lower for the week. The gains came on the back of positive Asian markets amid easing US-China trade tensions. The Nifty index ended 98.3 points or 0.91 per cent higher at 10,946.2.” Banks and auto stocks in India rose reflecting the upward thrust likely due to the Chinese moves on reserve requirements, Jasani said.
China’s central bank on Friday said it was cutting the amount of cash that banks must hold as reserves for the third time this year, releasing a total of 900 billion yuan ($126.35 billion) in liquidity to shore up the slowing economy.
The People’s Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) by 50 basis points (bps) for all banks, with an additional 100 bps cut for some qualified smaller lenders.
In Asia, Hang Seng, Shanghai Composite Index, Nikkei and Kospi settled in the green. Exchanges in Europe were also trading in the positive zone in their respective early sessions.