Rampaging bulls send Sensex up over 500 points; 5 top drivers

The domestic equity market saw a sudden bounce in Thursday’s trade amid F&O expiry and a day ahead of the Interim Budget due on Friday. Sensex shot up 500 points, or 1.40 per cent, at 36,080, while Nifty topped the 10,750 mark. Analysts attributed the jump to short-covering ahead of F&O expiry and expectation of something good in the Interim Budget.Inaugurating the Budget session of Parliament, President Ram Nath Kovind on Thursday urged the government to focus on farmers, poor and the middle class, which analysts saw as hints of what’s in store in tomorrow’s Budget. Going by the buzz on Dalal Street, here are the five key factors fuelling the rally in stocks: Budget expectations: President Ram Nath Kovind in his address to Parliament on Thursday urged the government to focus on farmers, poor and the middle class. Analysts saw it as hints of what’s in store in tomorrow’s Budget. Budget sops for the middle class and rural India can push consumption and also domestic savings, which has been a key driver of the domestic stock market in recent months. “It is a pre-Budget rally. The market is assuming something good in tomorrow’s Budget. There is some short-covering also ahead of F&O expiry,” said Sanjeev Jain, AVP, Ashika Stock Broking. The dovish commentary from the US Fed also lifted market sentiment, he added.Robust global cues: Most Asian markets traded in the green in morning trade following gains on Wall Street after the US Federal Reserve left interest rates unchanged and said it would be patient with further rate hikes. Hang Seng and Nikkei advanced up to 1 per cent. In the US market, Dow Jones Industrial Average gained 1.77 per cent in overnight trade while S&P500 index surged 1.55 per cent. Rupee appreciates vs dollar: A strengthening rupee also boosted market sentiment. The domestic currency rose by 26 paise to 70.86 against the greenback in opening trade amid weakening of the greenback in overseas markets.Buying in heavyweights: Buying emerged in heavyweights like Reliance Industries, Infosys and the HDFC twins, which gave the Sensex a 320-point boost in afternoon trade. Shares of Reliance, Infosys, HDFC and HDFC Bank were up between 2 per cent 3.50 per cent at around 1.05 pm (IST).Govt may meet fiscal target: Market participants also got some booster after economists at SBI Research said the government seems to be on course to meet its fiscal deficit target for this financial year and the same is likely to pegged at Rs 6.72 lakh crore, or 3.2 per cent of GDP, for next financial year, assuming a moderate nominal GDP growth of 11.7 per cent.Market sentiment also got a boost from fresh buying by foreign portfolio investors (FPIs), who infused a net of Rs 130.25 crore on Wednesday. Domestic institutional investors (DIIs) were net buyers to the tune of Rs 502.26 crore, provisional data showed. Analysts said investor sentiment was buoyed by dovish comments from the US Federal Reserve after it left key US lending rates unchanged on Wednesday.

from Economic Times http://bit.ly/2GcjBK2