The 30-pack BSE benchmark Sensex and the 50-pack NSE benchmark Nifty recovered on Monday after IT stocks led the rally with auto and consumer durables. This not only cut the three consecutive days of losses, but also gave respite to Indian markets that have been on the decline for the past two months.
Sensex gained almost 555 points (554.84 points) to settle at 80,364.49, while the Nifty gained 198.20 points to close at 24,625.05.
Mahindra & Mahindra, Tata Motors, Trent, Eternal, Asian Paints and Infosys were the major gainers of the 30-pack Sensex.
Market watchers said that a mix of factors led to the recovery run, including the latest government data for April-June that revealed that the Indian economy grew by a better-than-expected 7.8 per cent.
Prime Minister Narendra Modi’s presence at the SCO Summit with Chinese President Xi Jinping and Russian Premier Vladimir Putin hinted at India pushing back at American bullying, turning investor sentiment to positivity.
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Over the weekend, the Centre posted a 7.8 per cent GDP growth in the April-June period, the fastest in the past five quarters. Analysts now expect the proposed GST reforms to lift growth in the upcoming quarters.
“This, along with the huge liquidity coming into mutual funds, will continue to support the market,” V.K. Vijayakumar of Geojit Investments pitched in.
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“The coming together of China, India, and Russia can have profound consequences on global power equations and thereby on global trade. This will have an impact on the stock market too,” he said.
The RBI on Friday also revealed that India’s forex reserves slumped by $4.386 billion to $690.72 billion during the week ended August 22.
Domestic investors continued to lift the markets despite the exodus of “West-friendly” foreign investors. On Friday, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,312.66 crore, but Domestic Institutional Investors (DIIs) bought Rs 11,487.64 crore of stocks.
Despite the rally, the rupee continued to slide, depreciating 17 paise to 88.26 against the dollar in early trade on Monday, as persistent foreign fund outflows weighed on investor sentiments.
Now investors hope that the Sensex will keep the upward momentum in the coming days.