Sensex rose 777 points, its best single-day performance in nearly 7 years, after fiscal steps announced in the Budget opened up more room for RBI to ease its policy. The BSE Sensex closed at 23,779.35, a jump of 777.35 points, or 3.38 per cent. The NSE Nifty at the close was up 235.25 points, or 3.37 per cent, at 7,222.30.
Top 5 reasons why Sensex surged over 700 points today
1. Renewed hopes of a rate cut by the Reserve Bank of India boosted the sentiments. The government’s decision to stick to its projected fiscal consolidation path and reduce its net borrowing programme from Rs 4.8 lakh crore in FY16 to Rs 4.25 lakh crore in FY17 would give Reserve Bank of India (RBI) room to cut interest rate, which will stimulate the economy.
2. Market sentiments also got support after government said investment limit for foreign entities in Indian stock exchanges will be enhanced from 5 per cent to 15 per cent on par with domestic institutions. The move will enhance global competitiveness of Indian stock exchanges and accelerate adoption of best-in-class technology and global market practices.
4. Indian rupee advanced another 18 paise to 68.24 against the dollar in early trade on sustained selling of the US currency by banks and exporters.
5. Proposals of higher spending in infrastructure and allocation of nearly Rs 36,000 crore for the farm sector and a higher credit target aimed at doubling farmers’ income in five years helped improve market sentiment.