The buoyant sentiment on the bourses due to good financial results by the corporates and deferral of rules on tax avoidance enabled the Bombay Stock Exchange (BSE) 30-share sensitive index (Sensex), on Tuesday, to cross the 20000-mark intra-day though it closed below that mark.
This is the second successive session that the Sensex gained handsomely to record a two-year high.
“The government’s decision to defer the implementation of controversial rules on tax avoidance has been a big positive for the market,” said Amar Ambani, Head of Research, India Infoline Ltd (IIFL).
The Sensex closed at 19986.82 with a gain of 80.41 points, after recording a high of 20036.82 intra-day. It touched a low of 19881.78.
A broader National Stock Exchange’s index, Nifty, closed at 6056.60, up 32.55 points.
BSE realty stocks led the rally with a gain of 1.5 per cent, followed by banks 0.72 per cent and fast moving consumer goods 0.59 per cent. However, BSE IT and metal stocks ended in the red with a fall of 0.23 per cent and 0.30 per cent, respectively. Among the broader indices, BSE mid-cap gained 0.27 per cent, BSE 100 0.45 per cent, BSE 200 0.40 per cent and BSE 500 0.38 per cent. But the small-cap stocks lost out of the rally with a marginal fall of 0.06 per cent.
Strong corporate earnings — Infosys, Axis Bank and TCS — reported so far and expectations of a rate cut by the Reserve Bank of India (RBI) following a downward trajectory in Wholesale Price Index (WPI) inflation were suggesting that the current rally was likely to continue with minimal correction in the immediate term, said Mr. Ambani, adding, “The fact that foreign institutional investors (FIIs) have already pumped in Rs.8,700 crore this calendar year into Indian equities shows the inherent strength in the market.”
“It was another strong day for the markets with the Sensex crossing the 20000-mark during the day. We believe that strong results from early announcers have buoyed the sentiment of the market. TCS and Axis Bank have reported decent numbers for the third quarter,” said Dipen Shah, Head of Private Client Group, Research, Kotak Securities.
“Markets are also expecting interest rates to moderate after WPI came in at 7.18 per cent for December. Deferral of GAAR to April 2016 also continued to have a positive impact on sentiments,” Mr. Shah added.
