Market welcomes new RBI chief: Sensex rallies 629 points\, Nifty scales 10\,700

Market welcomes new RBI chief: Sensex rallies 629 points, Nifty scales 10,700

The expectations of higher spending on farmers and agriculture-related activities by the newly formed state governments in Chhattisgarh, Madhya Pradesh and Rajasthan to fulfil their electoral promises and hopes from the Narendra Modi govt to address farmers' concerns ahead of the Lok Sabha elections led to a rally in two-wheeler and rural theme-based stocks.

Bulls returned to the Dalal Street with their full might on Wednesday as the Sensex and Nifty moved over the uncertainty related to the results of assembly elections in five states.

The expectations of higher spending on farmers and agriculture-related activities by the newly formed state governments in Chhattisgarh, Madhya Pradesh and Rajasthan to fulfil their electoral promises and hopes from the Narendra Modi govt to address farmers' concerns ahead of the Lok Sabha elections led to a rally in two-wheeler and rural theme-based stocks.

This along with hopes that there would be some easing of Prompt Corrective Action (PCA ) norms for banks and infusion of additional liquidity into NBFCs after the new RBI governor Shaktikanta Das took charge in morning today led to strong buying in banking stocks.

"The appointment of the new governor is likely to calm investors and ease any uncertainty about the next head of the central bank," economists at HDFC Bank wrote in a note.

While the Sensex closed 629 points higher to 35,779 level, Nifty gained 188 points to 10,737. Hero MotoCorp (7.01%),  Bharti Airtel (6.69%) and Adani Ports (5.35%) were the top Sensex gainers.

The YES Bank stock closed 5.07% higher at 186.40 a day ahead of the board meeting to discuss the names of candidates for the position of next MD and CEO after Rana Kapoor's term ends on January 31, 2019.

The board will also recommend names for new chairman to be approved by the RBI as well as consider the appointment of independent directors.

All 30 Sensex stocks closed higher. 

The BSE mid cap index rose 2.53% or 371 points to 15,040 level. The Small cap index rose 2.46%  to 14,404 level.

Among 19 BSE sectoral indices, BSE auto, (715 points or 3.58%), BSE Bankex ( 576 points or 1.97%), and capital goods (438 points or 2.45%) indices led the gains in trade today.

Banking and non-banking financial companies stocks rallied. Among banking stocks, Corporation Bank was up 3.46%, Dena Bank 4.33%, UCO Bank 3.21%, Central Bank of India 3.21%, Indian Overseas Bank 4.75%, Andhra Bank 5.04%, Syndicate Bank 7.66%, Allahabad Bank 4.40% and Bank of India 7.46%.

Among NBFC stocks, Indiabulls Housing Finance rose 5.63%, Edelweiss Financial Services 3.02%, Can Fin Home 8.09%, IIFL Holdings 3.67%, Bajaj Finance 2.15% and Bajaj Finserv 2.48%.

On a net basis, foreign portfolio investors (FPIs) sold shares worth Rs 2,421.06 crore on Tuesday, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 2255.68 crore, provisional data available with BSE showed.

Market breadth was positive with 1911  stocks closing higher compared to 652 ending lower on the BSE.

Global markets

France's CAC 40 edged up 0.9 percent to 4,849.45 in early trading, while Germany's DAX added 0.7 percent to 10,850.39. Britain's FTSE 100 was up 0.5 percent to 6,837.35. US shares were set to drift higher with Dow futures rising 0.4 percent to 24,528. S&P 500 futures rose 0.4 percent to 2,650.90.

Japan's benchmark Nikkei 225 jumped 2.2 percent to finish at 21,602.75. Australia's S&P/ASX 200 edged up 1.4 percent to 5,653.50. South Korea's Kospi was up 1.4 percent at 2,082.57. Hong Kong's Hang Seng added 1.6 percent to 26,186.71, while the Shanghai Composite index rose 0.3 percent to 2,602.15. Shares also rose in Taiwan, India and most Southeast Asian markets.

Edited by Aseem Thapliyal