Sensex, Nifty end at all-time highs as lockdowns ease
PremiumThe benchmark BSE Sensex gained 228.46 points or 0.44%, closing at 52,328.51, while the Nifty gained 81.40 points or 0.52%, closing at 15,751.65
Stock markets closed at new highs on Monday, with investors hoping that relaxation of curbs put in place to fight covid will spur demand and fuel an economy hit by the second wave of the pandemic.
The benchmark BSE Sensex gained 228.46 points or 0.44%, closing at 52,328.51, while the Nifty gained 81.40 points or 0.52%, closing at 15,751.65.
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“Equities extended gains in today’s volatile session ahead of PM Narendra Modi’s address to the nation. Hopes of easing curbs and the Centre’s covid vaccination policy pumped up optimism. Barring metal and pharma, all major sectoral indices were in positive terrain with energy, utilities and power stocks leading the rally," said Vinod Nair, head of research, Geojit Financial Services.
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Modi said in a televised speech that the Centre will take over the task of vaccination and provide doses free of cost to all adults from 21 June. Private hospitals can continue to procure 25% of vaccines but their charge would be capped at ₹150 per dose, he said.
Modi also said free foodgrain will be available in fixed quantity every month for more than 800 million citizens till Diwali.
“Higher spending towards free foodgrain and wider vaccine provision, along with the enhancement in fertilizer subsidy and the likely enlargement in allocation for the Mahatma Gandhi National Rural Employment Guarantee Act clearly outweigh the savings of around ₹1 trillion from prepayment of the Food Corporation of India’s liabilities in FY21, indicating a net expansion in expenditure above the level budgeted for FY22," said Aditi Nayar, chief economist, ICRA Ltd.
“This, in addition to the potential sharper slippage in disinvestment inflows relative to the higher-than-budgeted surplus transfer by the Reserve Bank, suggests a high likelihood that fiscal deficit will exceed the budgeted ₹15.1 trillion. With fiscal costs mounting amid rising crude prices, G-sec yields will display a hardening bias despite G-SAP 2.0," Nayar said.
Meanwhile, goods and services tax (GST) collections fell to an eight-month low of ₹1.03 trillion in May after hitting an all-time high in April.
The India volatility index, or VIX, fell 2.34% from 15.94 to 15.57 levels, an indication that investors are hoping the market rally will continue.
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