Led by gains in rate-sensitive stocks, Indian equities ended in the green for the third consecutive session on Tuesday, with the 30-share Sensex crossing the 20,000-mark for the first time in two years as foreign portfolio investors continued to buy Indian equities.
As per provisional data on stock exchanges, foreign institutional investors (FIIs) net bought around $198 million worth of Indian equities as the government opened a new bag of optimism by deferring the general anti-avoidance rule (GAAR) to FY16. FIIs bought Indian equities for 11 straight sessions on Tuesday and have so far pumped in $1.98 billion.
After breaching the 20,000-mark in afternoon trade, the Sensex gained 80.41 points or 0.4% from Monday to close at 19,986.82. The 50-share Nifty advanced 0.54% or 32.55 points to settle at 6,056.60. The market breadth was balanced, with 1,126 stocks advancing and 1,154 stocks declining. According to a latest report by Deutsche Bank, the Sensex is expected to advance a further 14% this year if the Indian government and the central bank sustain policy measures to boost economic growth. The foreign major has pegged the year-end Sensex target at 22,500, with financial, energy, industrial, material and information technology stocks leading the gains.
Experts said fiscal consolidation, improvement in economic data points, increased expectations of cut in interest rates and recovery in corporate earnings all combined to fuel the rally on the Street. “The market has crossed the 20,000 psychological hurdle after a long time. I remain optimistic and think the market will touch new highs before the Budget. Many decisions taken by the government have led to such a confidence. Foreign money is entering in a big way and the GAAR decision has paved the way for big inflows in the near future,” said Motilal Oswal, CMD, Motilal Oswal Financial Services.
While the government on Monday announced its decision to delay the implementation of the controversial rules on tax avoidance to 2016, hopes of interest rate cut gathered further steam after data showed lower-than-expected rise in inflation. Experts also attributed the optimism surrounding Infosys and TCS’ Q3FY13 numbers, and a strong beginning to earnings season as