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Sensex reclaims 27,000 on optimism over Britain referendum

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Mumbai: On the day the UK votes on ‘Brexit’ referendum, market benchmark Sensex logged a surprise rally of 237 points to reclaim the 27,000-mark, in line with strong gains in Europe-based shares as investors saw fewer chances of Britain leaving the European Union.

Millions of Britons began voting today in the historic referendum that will decide whether the UK will stay in or leave the 28-nation bloc after an acrimonious campaign. The last poll tracker of ‘The Daily Telegraph’ and a YouGov poll for ‘The Times’ showed ‘Remain’ at 51 per cent and ‘Leave’ at 49 per cent.

Consequently, shares of Tata Motors, which gets a major part of its revenue from the UK, surged 3.28 per cent to Rs 488. Other companies with exposure to Britain also saw revival in buying after selling in yesterday’s trade. Bharat Forge, Hindalco and Infosys gained up to 2.03 per cent.

“Rising hopes of Britain remaining within EU nudged Indian stocks to break free of the sluggishness of the recent days. Europe’s firm opening added further fuel to the rally, pushing Nifty back towards a month’s highs,” said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.

The rupee surging by more than 24 paise against the American currency also helped. After moving in a tight range initially, the Sensex tended to look up in step with a firm global trend and recaptured the 27,000-mark to hit a high of 27,060.98. The gauge finally ended 236.57 points or 0.88 per cent higher at 27,002.22 — its highest closing since June 8.

The NSE 50-share Nifty rose 66.75 points or 0.81 per cent to close at 8,270.45. The index had dropped by 34.80 points or 0.42 per cent in the previous two days. Meanwhile, RBI is keeping a watch on Brexit developments and will take necessary steps including liquidity support to ensure orderly conditions in the financial markets.

Sebi and stock exchanges have also beefed up mechanism to deal with any excessive volatility.In the UK, FTSE 100 edged higher by 1.64 per cent ahead of the outcome of landmark British referendum dubbed ‘Brexit’. Other indices from the continent like France’s CAC and Germany’s DAX rose by 2.00 per cent to 2.20 per cent.

In Asia, Japanese stocks ended higher as the yen weakened against. Other indices like in Hong Kong, Singapore and Japan rose between 0.28 per cent and 1.07 per cent while stocks in China, South Korea and Taiwan moved down by 0.29 per cent to 0.47 per cent.

PTI

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