Benchmark indices rally on easing trade war worries

Indian stock market Monday rallied in line with global equities as investors globally heaved a sigh of relief after the US and China called a truce in their long-drawn trade tussle.

Besides, hopes of reform measures in the Union Budget to be unveiled on Friday also fuelled the rally in domestic equites.

Starting the budget week on a positive note, the BSE benchmark Sensex opened significantly higher at 39,543.73 and swung between a high of 39,764.82 and a low of 39,541.09 during the session. The index finally settled the day with 291.86 points, or 0.74 per cent, gains at 39,686.50.

Likewise, the broader NSE Nifty advanced 76.75 points, or 0.65 per cent, to end at 11,865.60. The index touched a high of 11,884.65 and low of 11,830.80 during the day.

On the Sensex, Tata Motors, Bajaj Auto, HDFC twins, IndusInd Bank and RIL emerged as top gainers, rallying as much as 3.23 per cent.

On the other hand, ONGC, HCL Tech, Maruti Suzuki, HUL, Asian Paints and Vedanta fell up to 3.99 per cent.

Of the 30 Sensex constituents, 22 closed in the green and 8 in the red.

Sectorally, BSE realty, auto, power, healthcare and finance were among the top gainers, rising up to 2.59 per cent.

Bucking the overall trend, oil and gas index slipped 1.69 per cent. Other sectoral losers were consumer durables, telecom and metal.

Broader BSE midcap and smallcap indices underperformed the benchmark Sensex.

"Global market rallied on account of trade truce between US-China and scope to maintain required oil supply from OPEC. While sequential pick up in monthly auto sales and a likely proposal to simplify GST rate due to rise in revenue collection boosted the market sentiment," Vinod Nair, Head of Research, Geojit Financial Services, said.

Investors are watchful ahead of the Union Budget and hopes that fiscal deficit is maintained in the long-term while short-term support is provided with minor dilution in FY20 with non-budgetary resources like RBI reserves, divestment and Public Sector Units, he added.

In Asia, shares in China and Japan rose, while Hong Kong and South Korea traded lower.

Indices in Europe were also trading significantly higher in their respective early sessions.

The US and China last weekend agreed on resuming trade negotiations after President Donald Trump offered concessions to his Chinese counterpart Xi Jinping when the two met on the sidelines of the G20 Summit in Japan.

From India's perspective, another major development was Prime Minister Narendra Modi's meeting with Trump on the sidelines of the G20 Summit on Friday, where both agreed for an early meeting of their commerce ministers to sort out concerns over bilateral trade disputes.

Meanwhile, the Indian rupee slipped 3 paise to 69.03 against the US dollar intra-day.

Brent crude futures, the global oil benchmark, surged 2.75 per cent to USD 66.52 per barrel.