The BSE Sensex on Wednesday breached the 40000-mark as good corporate earnings and optimism of tax relief charged up investors.
The 30-share index, which opened on a positive note at 40055.63, hit an intra-day high of 40178.12 and later settled at 40051.87 — a gain of 220.03 points, or 0.55 per cent. The benchmark is now only 134 points away from its record intra-day high of 40312 achieved on June 3.
The broader NSE Nifty jumped 57.25 points, or 0.49 per cent, to close at 11844.10.
Market circles said the mood remained buoyant on a good set of corporate results and expectations that the Centre may soon announce relief measures for equity investors.
These include doing away with the dividend distribution tax and a change in other levies such as long-term capital gains tax (LTCG) and securities transaction tax (STT). Strong buying by foreign portfolio investors (FPIs) also contributed to the rally.
Provisional data from bourses showed the FPIs made net purchases of Rs 7,192 crore.
While auto companies have reported positive sales in the festival season, it remains to be seen if this trend continues in the coming months.
“There is an optimism that green shoots may be finally building up. However, one has to wait for more data to see if there is a turnaround in the economy,” an analyst with a domestic brokerage said.
Reliance Industries Ltd chairman Mukesh Ambani had said the current slowdown was temporary and that the recent measures taken by the Centre would see the trend getting reversed in the coming quarters.
In Wednesday’s trading, the top gainers in the Sensex pack included the SBI, TCS, ITC, Bharti Airtel, Sun Pharma, Infosys and Bajaj Auto, rising up to 3.37 per cent.
However, Yes Bank, Maruti, IndusInd Bank, ICICI Bank and Bajaj Finance fell up to 2.41 per cent.
“The market is positive on expectations of fresh reforms from the government and change in the long-term capital gains tax. After a long time, the market is seeing incentive to invest in equities as the reduction in taxation is producing better-than-expected second-quarter results, providing hope that earnings growth will revamp further in the second half of this fiscal. The results are adding fuel to the market despite weakness in other global markets ahead the Fed interest rate decision and US-China trade talks agreement,” said Vinod Nair, head of research, Geojit Financial Services.
IndiGo soars
Shares of InterGlobe Aviation bounced back on Wednesday after three days of fall, rising over 7 per cent after IndiGo placed a firm order for 300 A320neo family aircraft.
The scrip climbed 7.19 per cent to close at Rs 1,511.70 on the BSE. During the day, it jumped 8.79 per cent to Rs 1,534.35.
In terms of traded volume, 2.80 lakh shares of the company were traded on the BSE and over 60 lakh units on the NSE during the day.
Sectorally, BSE IT, teck, oil and gas, FMCG, capital goods, utilities, telecom and energy indices gained up to 1.47 per cent.
Meanwhile, the rupee settled 6 paise lower at 70.90 against the US dollar as participants were cautious ahead of the Federal Reserve's monetary policy decision.
