Mumbai, Nov 27 (IANS) Efforts to get a key economic legislation passed during the winter session of parliament cheered the Indian equity markets during the late-afternoon trade on Friday.
Initially, both the bellwether indices of the Indian equity markets opened on a higher note, supported by hopes of a stimulus package in European Union.
A better-than-expected roll-over rate after Thursday’s derivatives expiry also supported markets’ gains.
However, initial gains were capped over concerns regarding the output of the winter session of parliament and weakening rupee.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) gained 176 points or 0.68 percent.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made gains during the late-afternoon session. It was higher by 62.55 points or 0.79 percent at 7,946.35 points.
The S&P BSE Sensex, which opened at 26,003.20 points, was trading at 26,134.41 points (at 3.00 p.m.) — 175.78 points or 0.68 percent up from the previous day’s close at 25,958.63 points.
The Sensex so far has touched a high of 26,184.65 points and a low of 25,937.32 points during the intra-day trade.
Analysts said that markets made gains on the back of increased hopes that the Goods and Services Tax (GST) bill will get passed during the winter session of parliament.
“Expectations that the government will be able to build consensus over the GST bill and get it passed supported markets’ gains,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
The government needs to pass the GST bill in this session to meet the April 1, 2016, roll-out deadline.
Besides the GST, hopes of European Central Bank (ECB) announcing a stimulus package during its next monetary policy meet slated for December 3 and rising European stocks gave a positive cue to Indian markets.
“The reasonably good roll-over (numbers) after yesterday’s expiry added to the positive momentum which helped prices rise,” James added.
Notwithstanding the equity positive sentiments, the market gains were capped due to a weak rupee.
The Indian currency dipped to 66.88 to a dollar at 9.15 a.m., falling nearly 40 paise in two days on account of selling by foreign funds. But some dollar sales by public sector banks, ostensibly at the behest of the Reserve Bank of India (RBI), cushioned the losses.
After quoting at the lowest levels since September 2013 in early trade, the rupee was hovering around 66.72 to a US dollar at 3.00 p.m.
“The trend of foreign institutional investors (FIIs) off-loading stocks due to the upcoming US FOMC (Federal Open Market Committee) and the expected rate hike in the US has impacted the rupee value,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.