Hopes for more reforms buoy markets; Sensex up 359 points (Roundup)

Heightened expectations of key reforms getting the parliamentary nod during the upcoming winter session buoyed Indian equity markets on Thursday, as a barometer index gained 359 points or 1.41 percent during the day's trade.

The government's efforts to reach out to the opposition before the crucial winter session to get the Goods and Services Tax (GST) bill passed cheered the markets.

In addition, value buying and a strengthening rupee restored investor confidence.

Furthermore, attractive stock prices and a string of major decisions announced by the central government to increase public spending in the infrastructure sector brought back investors.

On Wednesday, the union cabinet, headed by Prime Minister Narendra Modi, was in overdrive as it approved 27 decisions -- including some key ones such as divestment of equity in Coal India and direct subsidy for cane farmers.

These decisions signalled continuation of economic reforms and closely followed an official note issued last week, in which foreign equity norms were relaxed in some 16 sectors.

On Thursday, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made healthy gains during the day's trade. It closed higher by 111 points or 1.43 percent at 7,842.75 points.

Similarly, the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) rose during the day's trade.

The S&P BSE Sensex, which opened at 25,640.34 points, closed at 25,841.92 points -- up 359.40 points or 1.41 percent from the previous day's close at 25,482.52 points.

The Sensex touched a high of 25,884.52 points and a low of 25,603.10 points during the intra-day trade.

Vaibhav Agarwal, vice president and research head at Angel Broking told IANS that the Indian markets traded higher as the reform measures announced by the government had helped buoy investor sentiment.

"We expect the developments on the political front towards forming a consensus on GST will be keenly watched by investors ahead of the winter session beginning next week," Agarwal said.

"However, in the absence of any other major trigger, the markets would continue to react to global cues."

Agarwal added that strong global cues on the back of a likely US rate hike in December supported the Indian markets.

The clarity on the rate hike issue shows the US Fed's confidence in the ability of the US economy to sustain a rate hike. Nevertheless, higher interest rates in the US are expected to lead away FPIs (Foreign Portfolio Investors) from emerging markets such as India.

Besides equities, the rupee too made gains during the day's trade. It closed Thursday's trade higher by 11 paise at 66.19 to a US dollar from its previous day's close of 66.30 to a greenback.

The foreign institutional investors (FIIs) were net sellers in the day's trade at stock exchanges, whereas the domestic institutional investors (DIIs) were net buyers.

According to data with stock exchanges, the FIIs sold stocks worth Rs.343.18 crore, while the DIIs bought stocks worth Rs.233.82 crore.

Sector-wise, banking, automobile, consumer durables, information technology (IT), and capital goods indices witnessed healthy buying spree.

However, healthcare index ended in the red.

The S&P BSE banking index augmented by 278.86 points, automobile index gained by 267.03 points, consumer durables index edged-higher by 232.29 points, IT index rose by 194.18 points and capital goods index was up by 156.13 points.

The S&P BSE healthcare index ended lower by 12.83 points.

Major Sensex gainers during Thursday's trade were Bajaj Auto, up 3.33 percent at Rs.2,423.65; Vedanta, up 2.80 percent at Rs.91.70; HDFC, up 2.78 percent at Rs.1,212.55; Infosys, up 2.69 percent at Rs.1,047.30; and Maruti Suzuki, up 2.60 percent at Rs.4,652.95.

The major Sensex losers were Dr.Reddy's Lab, down 2.63 percent at Rs.3,286.80; Sun Pharma, down 1.46 percent at Rs.742.95; Coal India, down 0.36 percent at Rs.333.75; and Axis Bank, down 0.13 percent at Rs.463.