Mumbai: The equity markets staged a spectacular rally on Monday buoyed by strong gains in overseas markets as a lower-than-expected US jobs growth data dampened the prospects of an interest rate hike by the US Federal Reserve next month.
A rise in global crude oil prices and expectation about a normal monsoon and the passage of the bankruptcy bill in the upper house of the Parliament also supported the rally.
The Sensex soared 460.36 points or 1.82 per cent to end the day at 25,688.86 while the Nifty ended the day at 7,866, gaining 132.60 points or 1.71 per cent.
“The weak US payroll data raised hopes that the US Federal Reserve will not raise interest rates in June this year. Addition-ally, European stocks exte-nded their initial gains after latest data showed a rebound in German manufacturing orders,” said Shreyash Devalkar, fund manager, equities BNP Paribas Mutual Fund.
According to the provisional data released by the stock exchanges, foreign portfolio investors (FPI) bought shares worth Rs 224.40 crore.
The market rally was primarily driven by strong gains in financial sector stocks. While the shares of ICICI Bank, HDFC Bank and Axis Bank clocked over three per cent gains on Monday, Bajaj Auto, L&T, ITC and SBI surged 3.78 per cent, 2.72 per cent, 2.38 per cent and 2.30 per cent respectively.
Also providing comfort to the rally was an unexpected surge in global oil prices.
“Crude oil prices jumped above the $45 per barrel as massive wildfires in rural Canada continues to hit supply from the country’s vast oil reserves. The appointment of new oil minister in Saudi Arabia also buoyed sentiments,” stated IFA in its post market commentary.
