Global relief rally, Chinese reforms buoy markets; Sensex up 499 points

Mumbai, Sep 9 (IANS) A global relief rally sponsored by reforms and stimulus measures by the Chinese government supported the Indian equity markets — leading a barometer index to gain 499 points during the mid-afternoon trade session on Wednesday.

Back home the positive signs coming from the government on the reforms front, Prime Minister’s meeting with industry representatives, upcoming seventh pay commission and strengthening rupee supported the markets’ upward movement.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) made substantial gains a day after it rose 424.06 points or 1.70 percent.

Rally was also seen on the wider 50-scrip Nifty of the National Stock Exchange (NSE). The CNX Nifty was trading higher by 146 points or 1.89 percent at 7,833.80 points.

The S&P BSE Sensex, which opened at 25,682.87 points, was trading at 25,817.33 points (at 1.15 p.m.) — up 499.46 points or 1.97 percent from the previous day’s close at 25,317.87 points.

The Sensex touched a high of 25,820.56 points and a low of 25,553.61 points in the intra-day trade so far.

Analysts cited that the global relief rally which was strengthened after the US markets joined-in after the Labour Day holiday and reforms being initiated by the Chinese government boosted investor confidence.

“The global relief rally has been strengthened after the US markets opened on Tuesday. The positive cues coming in from China has helped buoy sentiments,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services told IANS.

“The Chinese are implementing reforms that will encourage long term investments in stock markets by waving taxes and installing circuit breaker systems to curb volatility in the stock markets.”

The Chinese government has announced plans to increase funding to infrastructure projects and in part provide a stimulus package that might include tax breaks and other incentives.

Among the Chinese markets, Hong Kong’s Hang Seng gained by 4.25 percent and Shanghai Composite Index was higher by 1.60 percent.

According to James, other trigger for the rally was the meeting between Prime Minister Narendra Modi and industry representatives on Tuesday, while reports on the upcoming seventh pay commission also brought in cheers to investors.

“The PM’s meeting and message for the industry to increase investments has sent a very positive sign. On the other hand the seventh pay commission, strengthening rupee and cooling oil prices supported the markets,” James added.

Sector-wise, all 12 sub-indices of the BSE made gains during the intra-day trade.

The S&P BSE automobile index zoomed by 546.56 points, banking index augmented by 480.42 points, consumer durables index gained by 265.06 points, capital goods index rose by 233.81 points and metal index was higher by 221.71 points.

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