Kicking off a new week on a bullish note, Indian equity benchmarks jumped by more than 1 per cent on Monday with the Sensex soaring by over 300 points and the Nifty surpassing the psychological level of 7,700 as the government’s decision to cut interest rates on small savings further bolstered speculation of a rate cut by the Reserve Bank of India (RBI) at its upcoming policy meet on April 5.
Marking a second straight rally, the 30-share Sensex jumped by 332.63 points or by 1.33 per cent to end at 25,285.37, while the Nifty closed at 7,704.25 up by 99.9 points or by 1.31 per cent.
The BSE Sensex touched intraday high of 25,327.45 and intraday low of 24,988.27. The NSE Nifty touched intraday high of 7,713.55 and intraday low of 7,617.7.
The country’s central bank is poised to cut the repo rate by at least 25 basis points next month as softening consumer inflation, coupled with the government’s decision to maintain fiscal prudence in the Union Budget leave more leeway for policy easing to help buoy demand and revive investments in Asia’s third biggest economy. Moreover, a reduction in the rate offered on small savings schemes, which are seen competing with term deposits offered by banks, also pave the way for further softening of borrowing costs.
Sentiment was also boosted after the Foreign Investment Promotion Board (FIPB) has given the green signal to 15 FDI investment proposals worth Rs 7,262 crore including that of Japanese insurer Nippon Life Insurance, Tata AIA and Aviva Life.
The top gainers of the BSE Sensex pack were Hindustan Unilever Ltd. (Rs. 880.35,+4.05%), State Bank of India (Rs. 196.65,+2.93%), Sun Pharmaceutical Industries Ltd. (Rs. 835.65,+2.42%), Larsen & Toubro Ltd. (Rs. 1227.80,+2.38%), Tata Motors Ltd. (Rs. 374.55,+2.36%), among others.
On the Sectoral front, consumer goods and capital goods advanced 2.01 per cent and 1.80 per cent, respectively.
The Market breadth, indicating the overall health of the market, was strong. On BSE out of total shares traded 3061, shares advanced were 1615 while 1246 shares declined and 200 were unchanged.
In Asia, China’s Shanghai Composite surged by more than 2 per cent to a two-month high and Hang Seng ended tad higher, as policymakers vowed to loosen curbs on the Chinese stock market. China Securities Finance Corp. stressed that it will boost lending to brokerages for their margin trading business in measures aimed at boosting the country’s stock market which recently fell prey to a rout and leverage more than halved from last year’s peak. Japan’s Nikkei 225 was closed for a holiday.