The Hindu Business Line : Monsoon, rail budget give stocks a boost

Mumbai, July 3 The domestic stock indices moved up sharply by 1.7 per cent each on Friday, the last trading session before the presentation of the Budget on Monday.

The Sensex closed 254 points higher, at 14,913; while the Nifty gained 75 points closing at 4,424.

The progress of the monsoon and the announcements in the Railway Budget had a positive impact on the market despite negative global cues, said analysts.

“There were no unpleasant surprises in the Railway Budget in the form of freight or passenger fare hikes. There were several new initiatives announced, and that led to a little bit of optimism on the General Budget too,” Mr Mehraboom J. Irani, Senior Vice-President (PMS), FCH Centrum Wealth Managers, said.

“The progress of the monsoon, which has now covered almost the entire country, also boosted sentiment,” Mr Irani said. Expectations of favourable announcements in the Budget led to buying in the shares of banks, capital goods, power, healthcare and realty; the respective BSE indices were up between one and two per cent.

Foreign institutional investors as well as the domestic institutional investors were net buyers of equities worth Rs 211 crore and Rs 298 crore respectively, according to provisional data.

“There was a lot of short covering and a positional (sector) shift by investors,” said Mr Arindam Ghosh, Chief Executive Officer, Mirae Asset Global Investment Management India.

“The (Economic) Survey is good. So, people’s expectation from the Budget is also positive,” he added.

The market breadth was even, with gainers (1,341) having a slight edge over the losers (1,263) among the 2,686 shares traded on the BSE.

However, there was lack of participation among the investors.