Amid concerns of an impending economic slowdown, the Sensex and Nifty gave investors reasons to cheer on Monday. Sensex skyrocketed 792.96 points to close at 37,494.12, while Nifty soared 228.50 points to 11,057.85, at closing. The indices clocked in their biggest single-day gain in three months following Finance Minister Nirmala Sitharaman's announcement to roll back higher taxes on domestic and foreign portfolio investors that were proposed during the budget presentation last month.
US president Donald Trump's comments on trade negotiations with China also pushed the markets higher on Monday. A drop in crude oil prices also added to the sentiment.
The BSE Sensex jumped over 650 points in opening trade, but only to slip into negative terrain. It fell over 200 points, before staging a smart rebound. The 30-pack index eventually settled the day 793 points, or 2.16 per cent, higher at 37,494.12. The NSE counterpart Nifty50 closed at 11,057.84, up 228.50 points, or 2.21 per cent
At the G7 summit, Trump said that the US and Chinese trade negotiators would "very shortly" resume talks in what he described as a breakthrough in the two economic superpowers' trade war. "China called last night..., said let's get back to the table. So we'll be getting back to the table," Trump told reporters at the G7 summit in Biarritz. Trump said that Chinese officials had made two "very, very good calls" and that "they want to make a deal".
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The president's tone was in marked contrast to the steady hardening of positions in the number one and two economies. Just last Friday, Trump sharply raised tariffs on all Chinese imports after Beijing hiked its own levies.
Sitharaman on Friday announced a raft of measures, including rollback of enhanced super-rich tax on foreign and domestic equity investors, exemption of startups from 'angel tax', a package to address distress in the auto sector and upfront infusion of Rs 70,000 crore to public sector banks, in efforts to boost economic growth from a five-year low.
Meanwhile, a report by DBS has predicted that the government is expected to announce two more tranches of support measures over the next fortnight, following last week's economy boosting package. "Taking a leaf of these recent measures, we reckon that the focus will be on finetuning measures along with an accommodative monetary policy, while steering clear of broad-based fiscal stimulus, said Radhika Rao, Economist at DBS Group Research.
The latter, nonetheless, could come into play if growth risks turn starker in second half of the year and into 2020, she added.
(With PTI inputs)
