Mumbai, Oct 1 (IANS) Monetary easing by the Reserve Bank of India (RBI), supportive Asian markets and strengthening rupee value propelled a barometer of the Indian equity markets to gain 74 points during the mid-afternoon session on Thursday.
The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange on Wednesday closed with gains of 376 points or 1.46 percent.
The Indian equity markets continued their upward trajectory after the RBI on Tuesday cut key lending rates by 50 basis points. The markets were anticipating an easing of only 25 basis points.
However, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading flat during the mid-afternoon trade session. It was trading with gains of only 4.75 points or 0.06 percent at 7,953.65 points.
The S&P BSE Sensex which opened at 26,344.19 points, was trading at 26,228.89 points (1.45 p.m.) — 74.06 points or 0.28 percent up from the previous day’s close at 26,154.83 points.
The Sensex touched a high of 26,431.80 points and a low of 26,171.20 points in the intra-day trade so far.
Analysts cited that more than expected monetary easing coupled with a dovish outlook by the country’s central bank, strengthening rupee value and stable Asian bourses supported the Indian markets.
“The rally has continued on the back of the more-than-expected monetary easing by the RBI. The strengthening rupee value and positive Asian markets also supported the upward trajectory,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
The rupee too continued to gain strength. It touched a day’s low of 65.48 against a US dollar from its previous close of 65.58 against a greenback. It was trading at 65.55 around 1.15 p.m.
“There is an expectation of a stimulus package announcement in Japan. This is driving the upward trend in the Asian markets and concurrently supporting our indices here,” James said.
The positive Asian markets has supported sentiments here. Japan’s Nikkei index was higher by 1.92 percent. The Chinese markets — Hong Kong’s Hang Seng index and Shanghai Composite Index will remain close till October 7, Wednesday on the account of Chinese national day.
According to James, the upward momentum might loose its steam as the latest Nikkei India Manufacturing PMI (Purchasing Manufacturers Index) for the last month showed a contraction.
The PMI was at a seven-month low of 51.2 in September.