India’s stock markets were turbo-charged after Finance Minister Nirmala Sitharaman unveiled an economic revival plan last Friday.

Equity speculators shed their excessive pessimism and responded positively to the Finance Minister’s reassuring gesture to withdraw the tax surcharge on foreign portfolio investors (FPIs) and promise to return with more announcements in the next couple of weeks.

The Sensex rose 800 points or 2.16 per cent to close at 37,497. The broader index Nifty gained 228 points or 2.11 per cent to close at 11,057.

Both the indices witnessed their largest gain in around three months. The rupee lost further ground against the dollar to close at 72.02, falling 36 paise from its previous close.

 

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FPIs sold stocks worth ₹752 crore in the cash market while domestic institutional investors bought stocks worth ₹1,272 crore. The Finance Minister spoke about recapitalising public sector banks and supporting the auto and NBFC sectors. Bank stocks rose the most on Monday. The Nifty Bank index was up 3.6 per cent. Among private banks and finance companies, HDFC surged 5 per cent and YES Bank gained 6 per cent. Bajaj Finance, ICICI Bank and HDFC Bank gained 4 per cent each. Among PSU banks, Indian Bank and Central Bank of India gained 10 per cent each and SBI was up 3 per cent.

“The short-term trend of the Nifty is positive and the market is now likely to head towards the key overhead resistance of 11,150 in the next few sessions. This hurdle is going to be crucial and a decisive/sustainable move above this area could lead the Nifty towards the next upside level of 11,450-500 in the near term,” said Nagaraj Shetti, Senior Technical & Derivative Analyst, HDFC Securities.

While the US’s calmer rhetoric on trade differences with China, too, played a role, there is still fear among traders that escalation of trade threats by both counties could hurt markets.

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