Sensex, Nifty Rise To Two-Year Highs, Reliance Industries Surges 4%: 5 Updates
Sensex rose 216 points to close at two-year high of 29,048 Reliance Industries led gains on Monday with 4% surge Nifty has rallied nearly 10% so far this year
Extending this year's rally, the Sensex and Nifty surged to two-year highs on Monday with Reliance Industries leading the gains with a 4 per cent surge. Indian shares opened on a strong note on Monday as the government moved a step closer towards launching a long-awaited Goods and Services Tax (GST) from July, after a panel of central and state finance officials finalised two key bills on Saturday. Further, better-than-expected third-quarter GDP numbers, earnings from India Inc, a supportive Budget and strong global markets have also lifted the sentiment on Dalal Street. With today's gains, Nifty has already rallied nearly 10 per cent so far this year. The Sensex rose 216 points to close at a two-year high of 29,048 while Nifty advanced 0.74 per cent, or 66 points, to close at 8,963 - a level not seen since March 3, 2015.
Here are five things to know:
1) The GST Council unanimously approved the draft central GST and integrated GST laws in its 11th meeting on Saturday with which the government moved one step closer towards launching the new tax regime from July.
2) Analysts further said that sentiment got boosted as hopes of Bharatiya Janata Party winning the Uttar Pradesh state elections have increased. "The expectation is that the BJP government will come into power in UP (Uttar Pradesh), and that is possibly driving the market a little more confident than before," said Deven Choksey, managing director at KR Choksey Shares and Securities.
3) Despite the notes ban, Indian economy clocked a much better-than-expected growth rate of 7 per cent in the December quarter, cementing its place as the fastest growing major economy. Economists polled by Reuters had forecast 6.4 per cent growth for the October-December period.
4) Earnings of Indian companies have also shown resilience in the December quarter. Sanjay Sinha, founder of Citrus Advisors, said "Q3 earnings were better than expected and sets the tone for good growth for subsequent quarters. The earnings downgrade cycle is likely behind us."
5) The rally in the market has been driven by domestic investors. In the first two months of this year (January and February), they have pumped over Rs 7,000 crore into equities. A big part of the domestic inflows has also been driven by retail investors. Experts say that nearly Rs. 3,000 crore is being invested by domestic retail investors through systematic investment plans of equity mutual funds every month. Foreign institutional investors, who were net sellers of Indian shares from October 2016 to January 2016, have turned net buyers of Indian shares and bought shares worth Rs 10,500 crore in February.
(With agency inputs)