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Markets rise for seventh day in a row, Sensex climbs 137 points to 36,484

The Nifty 50 Index was up 0.54%, or 59 points, to 10,967

Bloomberg & BS Reporter  |  Mumbai 

bse, sensex, bombay stock exchange

The benchmark indices climbed for a seventh session in a row after a sharp decline in oil prices and amid optimism that policy makers will move to stimulate the economy, including cutting the sales tax for a number of products.

The climbed 0.4 per cent, or 137 points, to 36,484, adding to a 4 per cent gain over the past six days and on course for its longest stretch of advances since July. The 50 Index climbed 0.54 per cent, or 59 points, to 10,967.

Investor confidence was buoyed in sectors from cement to consumer goods after Prime Minister Narendra Modi said the goods and services tax (GST) regime had stabilised and is reaching a stage where 99 per cent of goods can be at or under the 18 per cent tax slab. “The Prime Minister’s statement clearly indicates that fiscal stimulus is coming in full force and the is cheering it,” says Ajay Srivastava, managing director at Dimensions Consulting.

“The positive mood should help take the till the next earnings, which we expect to be poor given the muted festive season for companies.” Sentiment was also boosted by a three-day drop in the price of Brent crude, India’s biggest import. Oil near a 14-month low will help keep a lid on inflation and reduce input costs for a number of sectors including aviation, paints and chemicals.

“The decline in crude prices is very bullish for small and mid-cap companies that had seen a sharp fall,” said Abhimanyu Sofat, head of research at IIFL Securities.

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“Lower oil prices address the concern on margins and earnings, and the small and mid-cap segment now offers great value.”

“A declining trend for crude and a rising rupee can help wipe our current account deficit,” Sofat said. “With the central bank announcing more open market operations to buy bonds, improved liquidity will also help push consumer credit.” Seventeen of the 19 sector indices of the advanced, led by a gauge of realty companies.

ITC and Housing Development Finance Co. (HDFC) gave the biggest boosts to the benchmark, while Asian Paints and Axis Bank were the top performers, each gaining more than three per cent each.

Shares of RCom plunged as much as 13 per cent following a report that the government has rejected its deal to trade airwaves.

First Published: Wed, December 19 2018. 23:03 IST
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