Positive cues buoy markets; Sensex gains 311 points

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SME Times News Bureau | 03 Sep, 2015
Expectations of further monetary easing in Eurozone, rebound in global exchanges coupled with notification of the latest reform in the retrospective tax regime buoyed investor sentiments on Thursday leading to a barometer index gaining 311 points.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed with gains of 311.22 points or 1.22 percent.

A similar growth trajectory was witnessed at the wider 50-scrip Nifty of the National Stock Exchange (NSE). The CNX Nifty closed with gains of 106 points or 1.37 percent at 7,823 points.

The S&P BSE Sensex, which opened at 25,614.69 points, closed at 25,764.78 points -- higher by 311.22 points or 1.22 percent from the previous day's close at 25,453.56 points.

The Sensex touched a high of 25,835.41 points and a low of 25,555.77 points in the intra-day trade.

Analysts observed that the markets opened on a higher note supported by strong overnight US and European cues and positive Asian markets.

Coincidentally, the Chinese markets remained closed on account of Victory Day celebrations held to commemorate China's victory over Japan in the Second World War. The Chinese markets will remain closed on Friday as well.

Interestingly, the continuous slide in the Chinese markets had spooked global investors and dampened Indian equities on fear of another recession caused due to the slowdown in the $10 trillion-worth Asian economy.

The markets were additionally buoyed after the government notified the new amendments to the income tax act based on the recommendations of the Justice A.P. Shah Committee report on the applicability of minimum alternate tax (MAT) on foreign investors.

The report had recommended that MAT not be imposed on foreign portfolio and institutional investors. The MAT issue on capital gains was expected to impact the margins of foreign funds.

"The positive bias coming out of the Finance Minister's statement accepting the MAT recommendations and the subsequent notifications of the same has led to buying in the markets," Anand James, co-head, technical research, Geojit BNP Paribas, told IANS.

"Risk appetite has grown considering the fact that cyclical stocks like banking and finance gained... While rupee-hedged sectors like IT (information technology) and pharma came in for some selling pressure."

The Central Board of Direct Taxes (CBDT) has notified the recommendations made by the Shah panel on the applicability of MAT pertaining to the capital gains made by foreign investors.

Furthermore, a rebound in Asian markets, rupee's relative strengthening and value buying supported the markets' gains.

"Indian markets closed the day in the green led by positive global cues and value buying at lower levels. In the absence of any major domestic trigger, markets will look towards global cues, which are negative currently. We expect the markets to remain under pressure with profit booking on every rise," Vaibhav Agrawal, vice president, research, Angel Broking told IANS.

Analyst pointed out that markets will look out at the European Central Bank (ECB) meet being held later on Thursday and there are expectations of further expansion in quantitative easing.

Sector-wise, all the 12 indices of the BSE made gains during the day's trade.

The S&P BSE banking index zoomed by 359.04 points, the capital goods index augmented by 305.96 points, the automobile index gained by 229.38 points, the metal index rose by 172.88 points and the oil and gas index increased by 81.37 points.

Major Sensex gainers during Thursday's trade were: Tata Steel, up 4.55 percent at Rs.229.65; Vedanta, up 4.42 percent at Rs.98.05, Axis Bank, up 4.19 percent at Rs.486.40, HDFC, up 4.10 percent at Rs.1,172 and Hindalco Industries, up 3.42 percent at Rs.77.20.

The major Sensex losers were: Lupin, down 0.94 percent at Rs.1,863.10; Hero MotoCorp, down 0.57 percent at Rs.2,329.95 and Sun Pharma, down 0.56 percent at Rs.885.35.