A day ahead of the RBI Monetary Policy announcement, bulls went on the rampage on Dalal Street. Both the benchmark indices scripted a unilateral rally supported by foreign institutional investors’ buying and strong performance from banking and capital goods sectors.
Analysts said the slight improvement in the HSBC Indian Manufacturing Purchasing Managers’ Index (PMI), a measure of factory production, in May also bolstered the sentiment.
The right noises from the Finance Ministry on the reforms roadmap added to the overall positive sentiment. The BSE Sensex zoomed 468 points or 2 per cent to end at 24,685 while the Nifty rocketed 133 points or 2 per cent to 7,363.
Alex Mathews, Head Research, Geojit BNP Paribas Financial Services, said: “After remaining lacklustre at the end of May, FIIs once again vigorously started buying into Indian equities. The improved PMI data and expectation of a rate-cut by the RBI also kept the market buoyant.” The volatility index, India VIX, stood at 16.3725, up 0.22 per cent.
The market breadth was positive with 2,002 stocks advancing and 976 declining. Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services, said: “A glimpse of the likely actions by the new government in the form of FDI hike in insurance and the talk of clearing large projects got the market rolling.”