Sensex rallies for second day as govt sets GST rates

ITC jumped 6.1% to a record, Monday's steepest gain among Sensex stocks

Indian stocks extended a rally, paced by consumer-goods companies, as investors cheered the finalisation of rates for the national sales tax. The benchmark Sensex ended close to its all-time closing high. 

The index advanced 0.4 per cent to 30,570.97 at the 3:30 pm close, near its all-time high of 30,658.77 set in May 17. The NSE Nifty 50 gauge added 0.1 per cent.

ITC, Asia’s second-biggest listed tobacco company, jumped 6.1 per cent to a record, Monday’s steepest gain among Sensex stocks. Five of the 13 sector gauges compiled by the BSE rose, led by the S&P BSE Fast Moving Consumer Goods Index. The gauge advanced 3.1 per cent to a new all-time high.

 

“It’s back to liquidity-driven markets now that the national sales tax has been smooth in terms of rates and there are no negatives,” said Andrew Holland, chief executive officer at Mumbai-based Avendus Capital Alternate Strategies Pvt. The rally in Indian stocks will continue and corrections, if any, will have a greater impact on small- and mid-cap stocks, he said.

The worst performer on the Sensex was the State Bank of India, the country’s largest lender by assets. The shares fell 4.5 per cent after the bank said it expected “slightly higher” credit costs in the financial year that began April 1.

Overseas investors have purchased more than $7 billion of local stocks through May 18 this year, while domestic funds bought almost 227 billion rupees ($3.5 billion) of Indian shares through April. Bloomberg