Indian shares jumped 3.4 percent on Tuesday to post their best single-day gain in more than two years as gains throughout Asia and relief about the government's commitment to its fiscal deficit target for the next fiscal year boosted sentiment. The broader NSE index rose 3.37 percent to end at 7,222.30, marking its biggest daily gain since September 2013 when India was in the midst of its worst currency crisis in more than two decades. It had earlier gained as much as 3.5 percent.
The benchmark BSE index jumped 3.38 percent. A commitment by Finance Minister Arun Jaitley on Monday to meet the fiscal deficit target of 3.5 percent of the gross domestic product is also raising hopes it would raise confidence among foreign investors after heavy selling this year.
Markets also gained tracking advances in Asian markets following China's monetary easing and downbeat manufacturing and service surveys that raised hopes of additional stimulus measures. "Markets are rallying because the budget was good - fiscal deficit commitments were adhered to and there was no tinkering on the capital gains tax structure," said Varun Khandelwal, a director at advisory services provider Bullero Capital.
"Additionally, pressures in global markets have alleviated on the back of PBoC (People's Bank of China) liquidity injections and in anticipation of dovish stances by the Fed, and the ECB." A combination of a rate cut intended to support economic growth along with the government's pledge for fiscal discipline is also raising market hopes of a reversal in some of the strong foreign outflows this year. Foreign investors sold a net $2.2 billion from stocks and debt in February, the highest monthly outflows since October.
Comments
Comments are closed.