Sensex cheers Govt’s stand, moves up 400 points

Our Bureau Mumbai | Updated on March 12, 2018


The rally was supported by movement in capital goods, power, banking and realty sectors which gained over one per cent, though all other sectoral indices were also trading in the green.

The stock markets surged over 2 per cent on Friday taking note of the Government’s pro-reform stand.

The BSE Sensex closed at a 14-month high of 18752, up 403 points or 2.2 per cent. The NSE Nifty ended the day at 5691, up 136 points or 2.5 per cent.

Market-men said that the Government’s resolve to stand firm on its decision to allow FDI in retail, aviation and broadcasting sectors had boosted investor sentiments. This saw the markets open in the green on Friday. The announcements regarding the reduction in the withholding tax for external commercial borrowings to five per cent from 20 per cent and the outside support from the Samajwadi Party to the Government lent further momentum to the rally.

However, market experts said that the decision to open Rajiv Gandhi Equity Savings Scheme to first-time investors did not have a significant impact on the market. “With stocks hitting a 14-month high, there was a lot of short-covering as well which led to heavy buying. There was a lot of buying interest in the banking stocks and in the infrastructure stocks,” said Rikesh Parikh, Vice-President – Equities, Motilal Oswal Securities.

Stocks of power, capital goods and banking sectors were up four per cent. Stocks of the IT and TECk sector indices were the only ones to register a decline. Foreign institutional investors bought shares worth Rs 2,327 crore, while domestic institutions sold Rs 1,127 crore. On the BSE, retail investors sold shares worth Rs 176 crore.

Market analysts said while the mood among traders was buoyant, retail investors have all but stayed away from the market. “Small investors are still on the sidelines because they have not been able to make money in the last four to five years. At this point, they are only looking to trade a bigger loss for a smaller one,” said Gaurav Dua, Head of Research, Sharekhan. He, however, insisted that there was buying but only from certain quarters. “A trend where everyone is buying will take a while to happen.”

BHEL, Sterlite Industries, Tata Steel, SBI and Tata Power were the biggest gainers among Sensex stocks while TCS and Dr Reddys were the only stocks to witness a drop.

The rupee jumped to a four-month high of 53.47 against the dollar on Friday. The domestic currency had opened stronger at 54.20 on stronger domestic and Asian equity markets. Intra-day, it hit a high of 53.30.


Published on September 21, 2012

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