While 30-share BSE Sensex surged 629.06 points to end at 35,779.07, Nifty jumped 188.45 points to 10,737.60.
In a stellar performance, benchmark equity indices — Sensex and Nifty — posting biggest 1-day gains in 5 weeks Wednesday. While 30-share BSE Sensex surged 629.06 points to end at 35,779.07, Nifty jumped 188.45 points to 10,737.60. It was the second session in a row that equity benchmarks recorded handsome gains. However, what pushed strong buying across the board which led to a huge surge in Sensex and Nifty? Here are three key reasons:
Here are 3 key reasons behind today’s surge on Sensex and Nifty:
1)New RBI Governor takes charge
Former Economic Affairs Secretary Shaktikanta Das Wednesday assumed charge as the RBI Governor. He replaced Urjit Patel who abruptly resigned amid a face-off with the government over issues related to governance and autonomy of the central bank. The swift appointment instilled positivity in the markets.
On Tuesday, Ashok Wadhwa of Ambit Capital had told CNBC TV18. “..I think the most important thing that has happened is that resignation has been accepted of the previous governor, and new governor is in position.” Business would be back to usual from tomorrow morning. I would like to believe that markets would start looking at how companies are performing, he had also said.
Asian market rallied in the morning trade, fuelling positive sentiment in the domestic markets too, after the US President Donald Trump appeared hopeful of a trade deal with China. The US President told Reuters that the talks were taking place with China and the tariffs would not be raised until he is certain about the deal.
3)Brokerages confident of BJP win
The global brokerage CLSA said in a note that even as Congress scripted big win in the three key states, Modi is still the favourite to win 2019. Several other brokerages also expected that the issues in state elections are very different from those in the Lok Sabha polls and Modi-led BJP may make a comeback.
“Following the reversals for the incumbents in the state elections markets are expecting rural focused policies over the next few months. Also, the base metal prices went up accompanied by a strengthening currency helping metal stocks to do well. In terms of F and O, aggressive short covering in stock specific futures was accompanied by long build up in indices,” said Viral Berawala, CIO, Essel Mutual Fund.