Indian benchmark equity indices settled at record highs on Wednesday led by gains in index majors Infosys, Bharti Airtel, TCS and ICICI Bank. The government backed relief package for beleaguered auto and telecom sectors boosted the investor sentiment.
The BSE Sensex settled at record 58,723.20, up 476.11 points or 0.82%, while the broader NSE Nifty jumped 139.45 points 0.80% to a new peak of 17,519.45.
The today’s rally made investors richer by Rs 2.16 lakh crore as the market capitalization of the BSE listed companies rose to a record Rs 2,59,68,697.50 crore.
“The Indian market continued to add investor wealth as the broad market traded to record highs. Auto and telecom were the key sectors in anticipation of reforms to be announced by the government in the cabinet meeting. Cabinet cleared Rs.26,000cr PLI scheme for the auto sector in order to boost production of electric vehicles and hydrogen fuel vehicles. Reports of approval of a relief package for the telecom sector including a likely moratorium of AGR payment will provide relief to the debt-laden sector. On the global front, the much-awaited US inflation data indicated a slower than expected rise in prices, which is positive for the global market because of the likely fall in tapering risk,” said Vinod Nair, Head of Research at Geojit Financial Services.
Barring Nifty Media (down 1.55%), all other sectoral indices ended in the green. Nifty PSU Bank closing nearly 3% higher, was the top sectoral gainer followed by Nifty IT, up nearly 2%. Nifty Auto, Nifty Metal, Nifty Bank, Nifty Pharma, Nifty Realty and Nifty FMCG indices rose up to 1% each.
The volatility index India VIX spiked 1.14% to 13.73 levels.
Mirroring gains in the benchmark indices broader market rallied and closed at record highs. The BSE MidCap index advanced 162 points or 0.65% to a fresh closing high of 25,215. Likewise, the BSE SmallCap index settled at a new closing peak of 28,284 gaining 241 points or 0.86%. Earlier in the day the midcap index scaled to a new top of 25,241 and smallcap index 28,298.
Bulls overpowered bears in today’s session as 2,068 shares advanced compared to 1,238 declined and 115 remained unchanged.
The Union Cabinet on Wednesday approved a Rs 26,058 crore production linked incentive (PLI) scheme for the auto, auto-components and drone industry to enhance India’s manufacturing capabilities.
The PLI scheme will bring fresh investments of over Rs 42,500 crore in five years and incremental production of over Rs 2.3 lakh crore, he said.
Besides that, the Union Cabinet has approved nine structural reforms and five process reforms for the telecom sector, aimed at giving relief to companies such as Vodafone Idea that have to pay thousands of crores in unprovisioned past statutory dues.
European markets, as well as Asian stocks, were muted after weak Chinese economic data reignited worries that global growth is slowing. Investors, especially in Europe, keenly look forward to the upcoming German federal election on 26 September 2021, with polls suggesting the race is still too close to call as voters try to decide a successor to Chancellor Angela Merkel.
Meanwhile, in Hong Kong, the Hang Seng index dropped 1.53%. Casino stocks listed in the city plunged amid reported fears over tighter regulations as Macao kicked off a public gaming consultation. Shares of Wynn Macau and Sands China both plummeted more than 27% each, while Galaxy Entertainment Group dropped over 17%.
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