Mumbai: The equity markets opened the week on a buoyant note with both the Sensex and Nifty climbing to their highest level since August 2015 amidst strong rally in global stocks as a better than expected US jobs data reassured investors about the health of the world’s largest economy.
The progress of the monsoon and expectation about the passage of goods and services tax (GST) and India Inc’s earnings recovery also helped the markets to maintain their winning momentum at higher levels. After opening the day at a fresh 2016 high, the Nifty soared 144.70 points or 1.74 per cent to end the day at 8467.90 while the Sensex climbed 499.79 points or 1.84 per cent to end the day at 27,626.69. Meanwhile, the BSE mid-cap index hit an all time high of 12,078.59 in the intra-day trade before ending the day at 12,057.27.
“The fears about the impact of Rexit (Dr Raghuram Rajan’s exit from RBI) and Brexit were overblown whereas the real concern before the domestic markets was the progress of the monsoon and passage of the key pending legislations like the GST Bill. The rapid progress of monsoon throughout the country and the likelihood of the Congress Party dropping its opposition to the GST Bill in Parliament led to a buoyant mood in the market,” said Ajay Bodke, chief executive officer and chief portfolio manager–PMS at Prabhudas Lilladher. “It seems that the global markets have weathered the storm and the future movement of the domestic markets would depend on corporate earnings growth and the medium term outlook provided by various corporate managements,” he added. According to the provisional data released by the stock exchanges, foreign portfolio investors (FPI) pumped in Rs 1,055.80 crore on Monday.
“The markets across the globe surged ahead as the stronger than expected US jobs data suggested that the US economic recovery was back on track and data released by the Fed funds futures market indicated that investors are not pricing in an interest rate hike from the US Federal Reserve in 2016 despite the strong jobs report,” said Shreyash Devalkar, fund manager, equities, BNP Paribas Mutual Fund.
