Markets rally on positive global cues
MUMBAI: Indian equities surged on Friday in tandem with positive global market trends, as improving domestic macro indicators boosted sentiment, underpinned by gains in banking stocks. The Sensex ended at 36,076.72, up 269.44 points or 0.75%, while the 50-share index Nifty was at 10,859.90, up 80.10 points or 0.74%.
A rebound in global indices combined with a strengthening rupee cheered investors, according to analysts.
Analysts said a rebound in global indices combined with a strengthening rupee cheered investors.
The markets extended the rally by taking positive cues from global markets, according to Vinod Nair, head of research, Geojit Financial Services Ltd. “Investors remain focused on global growth momentum while easing tensions between the US government and Federal Reserve provided an opportunity to accumulate stocks after the recent consolidation. The market will closely watch the Q3 earnings expectation, while global cues will dictate the direction,” he ing a cut in interest rates by the Reserve Bank of India (RBI) in its next monetary policy review in February 2019.
“The sharp fall in crude oil prices, the healthy recovery in rupee/dollar and the controlled inflationary outlook may drive the RBI to closely review its monetary policy stance, which so far has been of ‘calibrated tightening’. The street is already pinning hopes on the RBI adopting a more dovish stance, and a rate cut in the monetary policy scheduled on February 7 also cannot be ruled out. This would help keep a check on any pull-back in bond yields, especially after the 10-year G-sec yield declined 94 basis points (bps) from its peak levels,” said Motilal Oswal Securities Ltd in a December 27 report.
However, data released by the government on Thursday suggested the economy is at risk of missing its budget deficit target for the current fiscal, while economists said the government had already started to cut capital spending to narrow the gap.
The data showed that the fiscal deficit in the April-november period stood at ₹7.17 lakh crore, or 114.8% of the budgeted target for the fiscal to March.