The BSE Sensex and NSE Nifty closed over one and a half percentage point up on Friday on the back of buying in frontline blue chip stocks amid strong global cues. Sentiments also got a boost after government data on fiscal deficit reflected and improvement in government finances. Sensex surged 401.12 points to close at 24,870.69, while Nifty climbed 138.90 points to settle at 7,563.55.
Below are the 5 reasons why Sensex rallied over 400 points today
1. Brokers said build-up of bets following the beginning of the February futures and options (F&O) series led to the markets rebound. Also, buying activity picked up momentum largely in-line with a firm trend in other Asian bourses after Bank of Japan introduced negative interest rate regime at its policy meet in order to revive the ailing economy. Asian equity markets ended in green on Friday, after Wall Street stocks rebounded overnight, crude prices extended overnight gains and the safe-haven Japanese yen weakened in the wake of further Bank of Japan easing.
2. Sentiments also got some boost after the fiscal deficit data for April-December 2015-16 presented a better picture of the government’s finance compared to the corresponding period last year. The April-December fiscal gap stood at Rs 4.88 lakh crore as against Rs 5.32 lakh crore y-o-y.
3. European equities bounced back on Friday, tracking a rally in Asia after the Bank of Japan stunned the markets by voting narrowly to introduce negative interest rates in a bid to revive inflation. The pan-European FTSEurofirst 300 index rose 1.1 per cent by 0856 GMT after having fallen 1.7 per cent in the previous session.
4. Appreciation in Indian rupee too supported the market sentiments. The rupee recovered 35 paise to 67.87 against the US dollar in noon deals at the Interbank Foreign Exchange market on fresh selling of the American currency by exporters.
5. Global benchmark Brent crude futures rose on Friday, moving nearly 8 per cent higher so far this week, and set for a second weekly gain, spurred by hopes of a deal among oil-producing countries to tackle the supply glut. Brent futures have jumped 28 percent since hitting an intra-day low of $27.10 a barrel on Jan 20 and up to its Jan 28 high of $35.84.