GDP growth surprise sends market to 6-month high, Sensex up 241 points

Robust GDP data for the December quarter allayed market fears as the Sensex on Wednesday rallied over 241 points to end at a six-month high of 28,985 amid firm global cues. GDP is gross domestic product.

The impact was such that even the broader NSE Nifty took back the 8,900-mark. NSE is National Stock Exchange.

The central statistics office on Tuesday showed that GDP expanded seven per cent in October-December quarter, belying all fears of the note ban derailing economic activity. It also retained its first advance growth estimate for the current financial year at 7.1 per cent.

The Sensex took off on a positive note and went past the key 29,000 mark to touch a high of 29,029.17 before settling higher by 241.17 points, or 0.84 per cent, at 28,984.49, a level last seen on September 8 last year when it had closed at 29,045.28.

The gauge had lost 149.65 points in the previous two sessions.

The NSE Nifty also moved up 66.2 points, or 0.75 per cent, to 8,945.8 after shuttling between 8,960.8 and 8,898.6.

A monthly survey showed that India's manufacturing sector grew for the second straight month in February.

Meanwhile, US President Donald Trump, in his address to the Congress, took a more measured tone, saying he is open to immigration reforms.

Moody's Investors Service said demonetisation will be credit-positive for India as it is likely to reduce tax avoidance and corruption, which cheered market players.

"A surprise growth of 7.1 per cent in December quarter GDP data and no negative comments in Trump's speech have given a renewed buying interest in the market. The impact of cash crunch seems over-estimated. February automobile sales numbers are looking better as discretionary spending is gradually picking up," said Vinod Nair, head of research, Geojit Financial Services.

Both the key indices have rallied by nine per cent in the past two months, largely on the back of a growth-oriented Budget, better-than-expected earnings from bluechip companies and strong global cues.

The government pegged GDP growth at a higher-thanexpected 7.1 per cent for 2016-17 despite the cash blues, with manufacturing and agriculture doing exceptionally well. Thus, India retains status as the fastest-growing large economy.