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Sensex gains 300 pts on global cues

The National Stock Exchange's Nifty gained nearly one per cent or 99 points to close at 10,265.7

Samie Modak  |  Mumbai 

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The benchmark rallied a little more than 300 points for a second day, buoyed by a sharp rally in global equities and expectation of a Bharatiya Janata Party (BJP) victory in the Gujarat election. The election in Prime Minister Narendra Modi’s home state is seen as a key test for his party, ahead of the general election in 2019. Market players see a BJP win as positive, for continuation in policymaking and reform. Meanwhile, most global equities have been gaining on tracking the gains on Wall Street in the US, where progress on a tax reform Bill is keeping sentiment upbeat. The 30-share gained 301 points or 0.9 per cent to close at 33,250.3. A day earlier, the index had added 352 points, or 1.1 per cent. The National Stock Exchange’s gained nearly one per cent or 99 points to close at 10,265.7, with 38 of its 50 constituents ending with a gain. Most Asian ended with a one per cent gain. According to opinion polls, the BJP could win but with a reduced majority, an outcome that would still soothe investors, hoping for more political stability. “If they do win, I think the will take it positively,” said Saurabh Jain, assistant vice-president, research, SMC Global Securities. The two per cent gain in two trading sessions was on the back of strong buying by domestic funds, even as foreign investors continued to take money off the table. On Friday, foreign portfolio investors (FPIs) sold shares worth Rs 675 crore, while their domestic counterparts pumped in Rs 1,243 crore.

In the past four trading sessions, FPIs have sold close to Rs 4,500 crore worth of shares. The ended this week with a 1.3 per cent gain. In the preceding week, it fell 2.5 per cent on concerns over the fiscal deficit. The Indian have rallied 25 per cent this year, underpinned by a rally in global equities amid benign liquidity conditions. The rally, however, has been largely on the back of valuation re-rating, due to lack of earnings growth. The Indian currently trade at close to 19 times the one-year forward earnings estimate, compared to their long-term trading average of 16 times. Experts are hoping for a strong recovery in earnings, to help normalise the valuations. graph

First Published: Sat, December 09 2017. 01:48 IST
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