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The NSE index rose to its highest in more than 15 months on Wednesday as the sentiment turned positive after the federal government and states made some progress on the Goods and Services Tax Bill.
State Finance Ministers have endorsed the Constitution Amendment Bill for the Goods & Services Tax, with some tweaks, giving the NDA government the upper hand in hardball negotiations with the Congress.
The sentiment was also boosted by hopes of stimulus by the Bank of Japan. Prime Minister Shinzo Abe stated that the planned stimulus package expected next week would be over 28 trillion yen ($265 billion).
The broader NSE index ended up 25.15 points or 0.29 per cent to 8,615.80 after earlier hitting its highest since April 17, 2015.
The benchmark BSE index gained 47.81 points or 0.17 per cent to 28,024.33 points after earlier hitting its highest since August 10, 2015.
Among BSE sectoral indices, banking index was up 0.89 per cent, auto 0.71 per cent, TECk 0.61 per cent and metal 0.6 per cent. On the other hand, healthcare index fell the most by 0.75 per cent, FMCG 0.51 per cent, consumer durables 0.23 per cent and realty 0.08 per cent.
Top five Sensex gainers were ICICI Bank (+3.00%), Adani Ports (+1.83%), Maruti (+1.64%), HDFC (+1.48%) and Tata Motors (+1.38%), while the major losers were Dr Reddy's (-10.07%), ITC (-1.51%), Tata Steel (-1.29%), Reliance (-1.00%) and Axis Bank (-0.9%).
Resistance level
Some analysts said markets could face resistance after recent strong gains since hitting near two-year lows on February 29. The NSE index is up 23 per cent since then.
“The market will face resistance at 8,600 level despite positive news about GST and other global factors,” said Mugilan K, deputy manager of research at Cholamandalam Securities.
“There hasn't been any major correction since the budget was announced but I expect it to drop to 8,300.”
Sageraj Bariya of East India Securities said: "US stocks closed mixed, looking slightly tired, after a recent run that has seen it chalk up record highs. Asian markets attempt a minor recovery after yesterday's losses, mainly driven by rebound in the Japanese stocks as yen lost footing against its American counterpart.The consensus does not see a rate hike in the Fed policy and it is largely expected that Fed may give weight to geopolitical risks arising from the Brexit vote. Market-wide F&O rollovers stood at 41 per cent till yesterday, compared with average rollovers of 45 per cent in the past three F&O series. A meeting between Finance Minister and his counterparts from the states resulted in some headway on the GST Bill. Earnings season will continue to dominate sentiments.''
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