Mumbai : Staging a surprise comeback, the benchmark BSE Sensex surged by 322 points to 27,828.44 on across-the-board buying in blue-chip stocks as investors started building fresh long positions in anticipation of a possible rate cut.
The recovery in equity markets was also helped by rebalancing of the MSCI’s global standard index, and the Securities and Exchange Board of India’s decision to back foreign institutional investors as they oppose the minimum alternate tax.
The addition of eight stocks into the MSCI global standard index caused a flush of liquidity in the stocks, said dealers. Lupin, Bharat Forge, Marico, Bharti Infratel, Eicher Motors, Container Corp of India, Shree Cement, and UPL were added to the global index, whereas while Reliance Infrastructure was taken out. There are, at present, 64 stocks in MSCI India index, including Infosys, HDFC, TCS, RIL, Sun Pharma and ITC. “We expect a minimum 25-basis-point rate cut (50 bps though more suitable) in the upcoming monetary policy review,” Edelweiss Financial Services said in a report.
The 30-stock index finally settled 321.73 points or 1.17 per cent higher at 27,828.44, its biggest since since May 18. On similar lines, NSE Nifty recaptured the 8,400-mark by rising 114.65 points or 1.38 per cent to 8,433.65 after hovering between 8,443.90 and 8,305.70, intra-day.
The gains in the market were led by shares of telecom, pharma, banks, cement, and automobile stocks. Bharti Airtel and Idea Cellular were among the top gainers on the Nifty.
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