Mumbai: Market maintained its post-Budget momentum for the second day as the benchmark Sensex surged 464 points to 24,243 — nearly a one-month high — led by gains in banking after RBI eased capital requirement rules for lenders. The central bank has allowed lenders to expand their capital base under the upcoming Basel III rules.
Asian markets turned positive on gains in oil prices and a solid set of economic data in the US. Rupee was a sentiment booster as it firmed up against the dollar to 67.59 (intra-day).
Sentiment remained bullish as buying paced up after the government stuck to its fiscal deficit target, which raised hopes of a rate cut by the Reserve Bank any time this month, brokers said.
Finance Minister Arun Jaitley maintained the fiscal deficit target for 2016-17 at 3.5 per cent of GDP. RBI relaxed rules to recognise more balance sheet items as common equity tier-I capital which will help unlock up to Rs 35,000 crore for these lenders impacted by asset quality troubles.
The 30-share Sensex, after a gap-up opening, rallied further and closed the session higher by 463.63 points, or 1.95 per cent, at 24,242.98 — its highest closing since February 8.
The gauge had posted its biggest single-day gain of 777.35 points in almost 7 years in yesterday’s trade. Now, the Sensex has gone up by over 1,240 points, posting its best two-day gains in almost seven years.
The 50-share NSE Nifty, after reclaiming the crucial 7,300-mark, settled at 7,368.85, up 146.55 points, or 2.03 per cent.
Shares of state-owned banks such as SBI, PNB, Bank of Baroda were at the centre of buying activity. Among the 30 Sensex components, SBI was the star performer surging the most (up 11.50 per cent) to Rs 180.85, followed by ICICI Bank (7.36 per cent) to Rs 220.20.
Gains in Adani Ports, Hero MotoCorp, BHEL, Tata Steel, Axis Bank, NTPC, HDFC and Maruti Suzuki supported the upside. As many 23 stocks gained while 7 led by M&M, Coal India, and Sun Pharma finished in the red.
Among sectors, the BSE realty index jumped most by rising 5.05 per cent, followed by banking (4.92 per cent), infrastructure (2.84 per cent), PSU (2.57 per cent), IT (2.49 per cent) and power (2.13 per cent).
The broader markets too continued to trend firm as retail investors boosted their bets, with the BSE small-cap index rising 2.21 per cent and mid-cap 1.88 per cent.
Asian shares, including those of Hong Kong, Japan, Singapore and Shanghai, remained in the positive territory while Europe ruled high on speculation that the global economic recovery will gain traction.
Foreign portfolio investors (FPIs) net bought shares worth Rs 1,760.98 crore yesterday, provisional data from stock exchanges showed.