The BSE Sensex closed 265 points up to regain the 28,000 mark on Wednesday. Nifty ended nearly 70 points above 8500 level. This is Nifty’s highest close in nearly three months. The index ended at 8,606 on April 17.
The hopes about rate cut and importing cheaper oil from Iran after it signed a nuclear deal with the major powers helped the Indian stock markets recover.
Continued buying interest by foreign investors too lifted market sentiment. Foreign investors bought shares worth around Rs 270 crore on Tuesday.
Blue-chip stocks rose on hopes lower crude oil prices would help India control its twin deficits and inflation, thereby creating headroom for the central bank to ease borrowing costs further.
Maruti Suzuki’s shares gained as much as 3.2 per cent to mark a record high of 4,179.95 rupees after Credit Suisse increased its target price on the stock and maintained its “outperform” rating.
Other blue-chips stocks – Tata Motors, Wipro, TCS, M&M and Lupin- also supported the rally.
Meanwhile, investors were keenly waiting for the US Fed Chair Janet Yellen’s two-day testimony before the US Congress and voting on reform measures by the Greek parliament, both scheduled later in the day.
In overseas markets, European stocks reversed initial losses on expectations Greece’s Parliament will approve a rescue deal. Key indices in the UK, Germany and France were up 0.01 per cent to 0.10 per cent.
Asian stocks ended mixed as key benchmark indices in Taiwan, Singapore, Japan, and South Korea were up by 0.14 per cent to 0.66 per cent.
Stocks fell sharply in China as surprisingly better GDP growth data diminished hopes for more stimulus. The Shanghai Composite lost 3.03 per cent. In Hong Kong, the Hang Seng index lost 0.26 per cent.
In the domestic market, 27 stocks out of the 30-share Sensex pack finished higher, while NTPC ruled steady.
Major gainers were Maruti Suzuki (2.63 pc), Tata Motors (2.22 pc), Wipro (2.00 pc), TCS (1.87 pc), M&M (1.82 pc), Lupin (1.54 pc), HDFC (1.41 pc), RIL (1.38 pc), Infosys (1.29 pc), Sun Pharma (1.22 pc) and Bajaj Auto (1.04 pc).
Among the sectoral indices, auto rose by 1.35 per cent, IT 1.19 per cent, teck 1.02 per cent and healthcare 0.97 per cent, while consumer durables fell 1.22 per cent.
The market breadth continued to remain strong as 1,539 stocks ended higher, 1,280 finished lower and 144 ruled steady.
Total turnover dropped to Rs 2,750.14 crore from Rs 2,908.95 crore yesterday.
Experts take on stock markets movement today
Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services Ltd
In spite of a spike in inflation (CPI) Nifty has easily conquered 8500 level. At a time when global risk was increasing, India outperformed led by DIIs inflows. Now global risk has reduced post the Greek debt deal, stabilization in Chinese market and Iran nuclear deal. FIIs have come back to the Indian market after a gap of 2 months which has provided an additional edge to India’s outperformance.
Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
Iran nuclear deal has certainly lifted the spirits of global markets, except for China which continues to see aftershocks from the recent stock market crash. The tepid reaction to the 7% GDP figure is also suggestive that its stock market may be less responsive economic signals for the short term, while it expects measures from the government. Meanwhile, Fed rate prospects are likely to assume more significance as improved prospects for financial crisis resolution in the Euro area as well as improved global growth as an outcome of Iran nuclear deal, also improve growth prospects of US. However, signals from US economic data remains less suggestive to that end, and Fed Chair’s testimony could be closely followed ahead of RBI’s rate announcement scheduled next month.
Gaurav Jain, Director, Hem Securities
Markets closed on strong note as International oil prices will come down with the imminent lifting of sanctions against Iran and India will be one of the beneficiaries. India is the world’s fourth largest oil consumer and also the second biggest buyer of Iranian oil after China. Also strong rupee and continued buying interest by foreign portfolio investors has lifted the sentiment of the market.
With PTI inputs