Speedy reforms buoy markets; Sensex up 367 points 

Mumbai, Nov 19:

Heightened expectations of key reforms getting the parliamentary nod during the upcoming winter session buoyed Indian equity markets and a barometer index provisionally closed 367 points or 1.44 percent up on Thursday.

Sensex-closes-a6706In addition, value buying and a strengthening rupee and a string of major decisions by the central government to increase public spending in the infrastructure sector restored investor confidence.

Attractive stock prices and announcements of disinvestment and interest subvention scheme for exporters brought back investors.

On Wednesday, the union cabinet, headed by Prime Minister Narendra Modi, was in overdrive as it approved 27 decisions — including some key ones such as divestment of equity in Coal India and direct subsidy for cane farmers.

These decisions signalled continuation of economic reforms and closely followed an official note issued last week, in which foreign equity norms were relaxed in some 16 sectors.

The government’s efforts to reach out to the opposition before the crucial winter session to get the Goods and Services Tax (GST) bill passed cheered the markets.

On Thursday, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made healthy gains during the day’s trade. It provisionally closed higher by 113 points or 1.46 percent at 7,844.80 points.

Similarly, the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) rose during the day’s trade.

The S&P BSE Sensex, which opened at 25,640.34 points, provisionally closed at 25,849.63 points (at 3.30 p.m.) — up 367.11 points or 1.44 percent from the previous day’s close at 25,482.52 points.

The Sensex touched a high of 25,884.52 points and a low of 25,603.10 points during the intra-day trade.

Vaibhav Agarwal, vice president and research head at Angel Broking told IANS that the Indian markets traded higher as the reform measures announced by the government had helped buoy investor sentiment.

“We expect the developments on the political front towards forming a consensus on GST will be keenly watched by investors ahead of the winter session beginning next week,” Agarwal said.

“However, in the absence of any other major trigger, the markets would continue to react to global cues.”

Agarwal added that strong global cues on the back of a likely US rate hike in December supported the Indian markets.

The clarity on the rate hike issue shows the US Fed’s confidence in the ability of the US economy to sustain a rate hike. Nevertheless, higher interest rates in the US are expected to lead away FPIs (Foreign Portfolio Investors) from emerging markets such as India. (IANS)

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