The benchmark indices BSE Sensex and NSE Nifty advanced for the fourth consecutive trading session on Thursday on hopes that the long-awaited GST Bill may be passed in the upcoming monsoon session of Parliament and narrowing monsoon deficit figures. Sentiments also got a boost after Cabinet approved the 7th Pay Commission.
On Thursday, Sensex surged as much as 329 points to 27,069.23, while Nifty gained as much as 104.15 points. Later, the 30-share index closed 259.33 points up at 26,999.72. Nifty settled 83.75 points up at 8,287.75to close at its highest level of 2016.
The Cabinet on Wednesday cleared the recommendations of the 7th Pay Commission according to which the overall hike in salary and allowance of central government employees and pensioners comes to 23.5 per cent.
Market experts believe robust monsoon this year along with passage for GST, expectation of uptick in corporate earnings and inflows by foreign investors will help benchmark indices to jump further 10-15 per cent from present levels.
Parliamentary Affairs Minister Venkaiah Naidu said the government will seek to ensure that Goods and Services Tax (GST) Bill will be passed in the upcoming session of parliament, scheduled from July 18 to August 12.
Meanwhile, after disappointing in first half of June, monsoon have gathered pace in second half of the month, leading to significant drop in countrywide rainfall deficiency. Overall rainfall deficiency in the country has reduced to 13 per cent. Deficiency in east and northwest India hovers around 26 per cent while in central India it is around 23 per cent.
G Chokkalingam, founder, Equinomics Research & Advisory said, “Sensex can touch 30,000 while Nifty will close the ongoing calendar year 2016 at around 9,100 levels on hopes of pick-up in monsoon, growth in indirect tax collection and uptick in corporate earnings.”
Chandan Taparia, Derivative & Technical Analyst at Anand Rathi Securities believes Nifty can touch 9,000 and Sensex can touch 29250 by year-end.
Nirdosh Gaur, managing director and chief executive officer, Moneypalm in an interview to FinancialExpress.com said, “We are having a view that domestic stock markets are currently optimally priced as Sensex is trading at price-to-earnings (PE) of 22 but we are expecting that market can run up for next two months on expectation of passage of GST and good monsoon expectations and PE of Sensex can stretched up to 24 in coming 2 months. We are expecting that Nifty and Sensex will hit new highs before March 2017 and we are expecting that Nifty will hit the levels of 9,500 and Sensex will hit levels of 31,000 before March 2017.”