Sensex rose 1,075 points today extending its bull run for a second straight day on the back of gains in financial, banking and FMCG stocks after the Modi government cut corporate tax rate to 22% last week. Nifty too zoomed 326 points or 2.89 per cent to end at 11,600.20 with 32 of its constituents closing with gains.
Sensex soared over 1,426 points intraday before closing higher by 1,075.41 points or 2.8 per cent at 39,090.03, a level not seen since July 17.
In the two-day rally, Sensex gained 2,996.56 points or 8.30 per cent, while the 50-share Nifty soared 895.40 points or 8.36 per cent. Top Sensex gainers were Bajaj Finance (8.70%), Larsen and Toubro (8.13%), Asian Paints (7.89%) and ITC (6.95%).
Of 30 Sensex stocks, 16 closed in the green. Top Sensex losers were Infosys (4.97%), Tata Motors (4.16%) and PowerGrid (4.07%). Tech Mahindra, TCS and Bharti Airtel fell over 2% each.
Banking and capital goods stocks led the gains today with their BSE indices rising 1,852 points and 1,184 points, respectively.
Sensex had logged its biggest single-day jump in over a decade by surging 1,921.15 points or 5.32 per cent on Friday after Finance Minister Nirmala Sitharaman delivered a surprise cut in corporate tax rates. Nifty had zoomed 569.40 points or 5.32 per cent on that day.
Ajit Mishra, Vice President, Research at Religare Broking said, “The Indian benchmark indices started the expiry week on a strong note buoyed by improved domestic sentiments post a slew of measures by the government last week. The market registered second straight session of healthy gains, despite unsupportive global cues. The Nifty opened on a strong note and traded with a positive bias throughout the session before ending with gains of 2.9% at 11,603.”
On how to approach the market in near term, Mishra said, “The Indian markets are trading near peak valuations so we would remain cautious on the markets and expect it to consolidate in the near term. However, the recent announcements made by the FM are definitely positive for the Indian economy from a long-term perspective. Hence, investors should focus on accumulating fundamentally sound stocks.”
BSE midcap and smallcap indices rallied 3.08 per cent and 2.73 per cent respectively.
Sectorally, BSE capital goods index, bankex, industrials, finance, FMCG, oil and gas, consumer durables and realty indices surged up to 6.55 per cent.
Market breadth was positive with 1638 stocks closing higher compared to 972 ending in red on BSE. 184 stocks were unchanged. As many as 103 stocks soared to the 52-week high while 216 scrips hit the upper circuit today.
Vinod Nair, Head of Research at Geojit Financial Services said, “Rally continued as the positive sentiment for revival in earnings growth attracted investors to the market. Banks outperformed while mid & small cap witnessed strong bargain buying in expectation of turnaround in consumption story and improvement in the balance sheet.”
“The 10 per cent tax reset has witnessed frantic buying across high tax-paying entities in the last two trading sessions. The rebalancing act has led to selling in IT & pharmaceuticals with a shift towards manufacturing & private banks & select FMCG stocks,” S Ranganathan, Head of Research at LKP Securities said.
On a net basis, foreign portfolio investors (FPIs) bought shares worth a net of Rs 35.78 crore on Friday. Domestic institutional investors (DIIs) also bought share worth Rs 3,001 crore, provisional data available with BSE showed.