Markets cheer IMF growth forecast: Sensex soars 342 points to 36,140

BL Internet Desk Chennai | Updated on January 24, 2018

A stock broker taking blessings from the bull on the Bombay Stock Exchange, as the Sensex zoomed past 36,000 and the Nifty breached 11,000 on strong all-round buying support. (Photo: Paul Noronha)

Nifty ends at record 11,084; SBI, Tata Steel spurt nearly 4%

The NSE index ended above the 11,000 mark and the BSE index closed above the 36,000 level for the first time on Tuesday after the International Monetary Fund said India would regain the title as the world's fastest growing major economy in 2018-19.

The 30-share BSE index Sensex ended higher by 341.97 points or 0.96 per cent at 36,139.98 and the 50-share NSE index Nifty closed up by 117.50 points or 1.07 per cent at 11,083.70.

Intra-day high

The Sensex touched an intra-day high of 36,170.83, surpassing its previous record of 35,798.01 touched on Monday.The Sensex took just five trading sessions (January 17- 23) to reach the historic 36,000-level from 35,000, while the NSE Nifty advanced to 11,000-mark from 10,000 in six months (July 26, 2017 to January 23).

The Nifty touched a new high (intra-day) of 11,092.90 on Tuesday, bettering its previous record close of 10,966.20 reached on Monday. Both indexes posted record closing highs for the fifth straight session as strong earnings results buoyed investor sentiment.

The IMF has retained its GDP forecast for the country at 6.7 per cent in 2017 and 7.4 per cent in 2018. In its World Economic Outlook Update, it also estimated that the Indian economy would grow by 7.8 per cent in 2019, which make the country the world’s fastest-growing economy in 2018 and 2019, the top ranking it briefly lost in 2017 to China.

Domestic sentiment was also buoyed after the US Government passed a temporary funding Bill that ended shutdown in the world's largest economy.

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Sectoral indices

Barring consumer durables, all other BSE sectoral indices ended in the positive zone. Among them, metal index was the star-performer and was up 4.29 per cent, followed by PSU 2.15 per cent, oil & gas 1.93 per cent and banking 1.63 per cent, while consumer durables index was down 0.33 per cent.

Tip five Sensex gainers were State Bank of India (+3.84%), Tata Steel (+3.72%), ONGC (+3.6%), ICICI Bank (+3.06%) and Coal India (+3.04%), while the major losers were Wipro (-1.78%), Tata Motors (-0.83%), Asian Paints (-0.76%), HDFC Bank (-0.64%) and TCS (-0.32%).

Brokers' reaction

According to brokers, positive global cues, strong liquidity in the market following unabated foreign fund inflows and widening of bets by investors ahead of the upcoming Budget on February 1, drove markets to record highs.

“Earnings so far have been positive and macro economic factors are fuelling the market movement,” said Sudhakar Pattabiraman, head of research operations at MarketSmith, which is part of financial services provider William O'Neil.

Previous concerns about the impact of the launch of a national goods and services tax (GST) or the country's shock decision in 2016 to remove higher-currency bills from circulation were also receding, he added.

Meanwhile, foreign portfolio investors (FPIs) bought shares worth Rs 1,567.51 crore yesterday, as per provisional data.

Asian stocks advanced on Tuesday after US senators struck a deal to end a three-day government shutdown, sending Wall Street's main indexes to record highs and keeping the dollar well supported. US lawmakers had passed a short-term measure on Monday to fund the federal government through February 8.

MSCI's broadest index of Asia–Pacific shares outside Japan rose 0.2 per cent to a fresh record peak. Australian stocks climbed 0.7 per cent and South Korea's KOSPI added 0.5 per cent. Japan's Nikkei was 0.45 per cent higher.

US stocks advanced on Monday as each of Wall Street's main scored records in the wake of a deal by US senators to end the federal government shutdown. Legislation to renew federal funding to the government cleared a procedural hurdle in the Senate and was expected soon to pass votes in the Senate and House of Representatives, allowing government to re-open through February 8.

(With inputs from Agencies)

Published on January 23, 2018

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