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Sensex remains bullish, closes up 464 points as RBI relaxes norms

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New Delhi :The post-Budget euphoria for market continued for the second straight day as the benchmark Sensex jumped 464 points to nearly a one-month high, with banking stocks leading the pack after RBI relaxed capital regulations.

To help shore up capital ratios, the Reserve Bank has allowed lenders to expand their base under the upcoming Basel III rules.

Additionally, there were some reassuring words from Finance Minister Arun Jaitley himself, who pledged all possible support to keep banks in “good health”.

Asia ruled in the green after a raft of solid economic data in the US, which pushed up buying activity further.

The 30-share Sensex closed the session higher by 463.63 points, or 1.95 per cent, at 24,242.98 — its highest closing since February 8.

The gauge had posted its biggest single-day gain of 777.35 points in almost 7 years in yesterday’s trade.

It has gone up by over 1,240 points, posting its best two-day gains in almost seven years.

The NSE Nifty 50 index settled at 7,368.85, up 146.55 points, or 2.03 per cent.

The big positive was the government’s commitment to its fiscal deficit target, raising expectations of a policy rate cut by RBI any time this month, traders said.

Finance Minister Arun Jaitley maintained the fiscal deficit target for 2016-17 at 3.5 per cent of GDP.

The rupee was another sentiment booster as it gained 31 paise to end at a 7-week high of 67.54 per dollar.

“The post-Budget rally extended for yet another day, with banks leading the pack after RBI eased capital regulations to meet Basel III norms. It also helped that FIIs were seen as buyers yesterday, putting a pause to their continuous sell off from Indian equities,” said Anand James, Co-Head Technical Research Desk, Geojit BNP Paribas Financial Services.

Shares of state-owned banks such as SBI, PNB, Bank of Baroda were at the centre of buying activity.

Among the 30 Sensex components, SBI was the star performer surging the most (up 11.50 per cent) to Rs 180.85, followed by ICICI Bank (7.36 per cent) to Rs 220.20.

Gains in Adani Ports, Hero MotoCorp, BHEL, Tata Steel, Axis Bank, NTPC, HDFC and Maruti Suzuki drove the upside.
As many 23 stocks gained while 7 lost.

Among sectors, the BSE realty index jumped most by rising
5.05 per cent, followed by banking (4.92 per cent), infrastructure (2.84 per cent), PSU (2.57 per cent), IT (2.49 per cent) and power (2.13 per cent).

The broader markets too continued to trend firm as retail investors boosted their bets, with the BSE small-cap index rising 2.21 per cent and mid-cap 1.88 per cent.

Asian shares, including those of Hong Kong, Japan, Singapore and Shanghai, remained in the positive territory while Europe ruled high on speculation that the global economic recovery will gain traction.

Foreign portfolio investors (FPIs) net bought shares worth Rs 1,760.98 crore yesterday, provisional data from stock exchanges showed.

Continuing its upward march for the fourth consecutive day, the rupee today surged by another 31 paise to end at a nearly seven-week high of 67.54 on persistent selling of dollars by banks and exporters in view of fresh foreign capital inflows.

A sustained rise in equity market also boosted the rupee sentiment. The sensex shot up further by 463.63 points or 1.95 per cent today.

The rupee resumed higher at 67.74 from yesterday’s closing level of 67.85 per dollar at the Interbank Foreign Exchange and shot up further to 67.53 before ending at a 7-week high of 67.54, showing a gain of 31 paise or 0.46 per cent.

The rupee had last ended at 67.29 per dollar on January 14, 2016. It has gained by 118 paise or 1.72 per cent in four trading days.

The rupee hovered in a range of 67.53 and 67.77 per dollar during the day. Meanwhile, the dollar index was up by 0.10 per cent against a basket of six currencies in the late afternoon trade.

The dollar was largely unchanged against the yen in Asian trade today, weighed by profit-taking despite an improvement in the market’s mood.

Pramit Brahmbhatt of Veracity Financial Services said, “The rupee opened on a positive note with a decent gain at 67.74/USD and since then we saw rupee strengthening taking cues from the domestic equity market, which saw a cheerful rally on the back of a rate cut hope in immediate monetary policy by the RBI”.

PTI

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