Sensex rebounds 241 points on FDI norms, easing Brexit fears
Recovering from its early morning plunge, BSE Sensex Monday soared 241 points as the government unleashed a new wave of FDI reforms and Brexit worries eased while hectic buying by institutions and talking-up by influential marketmen helped counter Rexit jitters.
Mumbai: Recovering from its early morning plunge, BSE Sensex Monday soared 241 points as the government unleashed a new wave of FDI reforms and Brexit worries eased while hectic buying by institutions and talking-up by influential marketmen helped counter Rexit jitters.
The rupee trimming its initial losses against the American currency too supported the rebound in equities.
Sentiment got a further boost after global rating agency Fitch allayed concerns of any impact on India's sovereign ratings due to RBI Governor Raghuram Rajan's decision against a second term saying "policies are more important than personalities" on this front.
Meanwhile, the Reserve Bank of India bought government's securities worth Rs 10,000 crore via OMO purchase auction held today, while the total amount offered by participants stood at Rs 45,922 crore.
In sweeping reforms, the government has decided to ease Foreign Direct Investment (FDI) norms in civil aviation, single-brand retail, defence and pharma by permitting more investments under automatic route.
The BSE Sensex lost 178 points in early trade to hit a low of 26,447.88 on Rajan's announcement. However, hectic buying thereafter helped the index return to the positive zone within minutes as it settled 241.01 points or 0.91 percent higher at 26,866.92. Overall, the market swung in a range of 437 points during the day.
The Sensex was down at 26,438 in pre-open trade between 0900-0915 hours, down nearly 200 points from previous close.
The NSE Nifty recaptured the 8,200-mark to close 68.30 points or 0.84 percent higher at 8,238.50 after hovering between 8,107.35 and 8,244.15.
From the 30-Sensex kitty, 18 ended higher and 12 finished lower.
Aviation stocks were in the limelight after the Centre's decision to allow 100 percent FDI in civil aviation. Stocks of Spicejet, Jet Airways and InterGlobe surged by up to 7.36 percent.
Shares of companies involved in manufacturing of defence equipments such as Reliance Defence, BEL and Bharat Forge also witnessed strong rally, rising by up to 7.39 percent.
Barring FMCG, all sectoral indices, led by IT, teck, auto, metal and capital goods ended in the positive zone with gains of up to 2 percent.
The broader markets too showed a firm trend with the BSE mid-cap index ending 0.40 percent higher and small-cap index gaining 0.37 percent.
Globally, Japan's Nikkei gained 2.34 percent, Hong Kong's Hang Seng gained 1.69 percent, while Shanghai Composite Index up 0.13 percent.
Europe was also in better shape on growing expectations that Britain will vote to remain with the European Union in Thursday's referendum. The UK's FTSE jumped 2.59 percent, Paris-based CAC 40 climbed 2.94 percent while Germany's DAX 30 was 3.11 percent higher.