India's NSE index rose to its highest in more than 15 months on Wednesday as sentiment turned positive after the federal government and states made some progress on the Goods and Services Tax bill. The broader NSE index ended up 0.29 percent to 8,615.80 points after earlier hitting its highest since April 17, 2015. The benchmark BSE index gained 0.17 percent to 28,024.33 points after earlier hitting its highest since August 10, 2015.
State finance ministers backed the tax bill after meeting with federal finance minister Arun Jaitley on Tuesday, rallying hopes of the bill getting cleared by the upper house of parliament in the current monsoon session. The sentiment was also boosted by hopes of stimulus by the Bank of Japan. Prime Minister Shinzo Abe stated that the planned stimulus package expected next week would be over 28 trillion yen ($265 billion).
Investors also waited for the outcome of the US Federal Reserve meeting, though it is widely expected that the rates would be kept unchanged. Some analysts said markets could face resistance after recent strong gains since hitting near two-year lows on February 29. The NSE index is up 23 percent since then. "The market will face resistance at 8,600 level despite positive news about GST and other global factors," said Mugilan K, deputy manager of research at Cholamandalam Securities.
"There hasn't been any major correction since the budget was announced but I expect it to drop to 8,300." Bank and auto stocks saw the biggest gains on the NSE. ICICI Bank and Maruti Suzuki India were up 3.4 percent and 2.3 percent respectively. Zee Entertainment Enterprises and United Spirits gained as much as 4.1 percent and 2.3 percent respectively after delivering highly profitable June quarter results. Dr Reddy's Laboratories continued its slide and saw the biggest percentage fall on the NSE on Wednesday after its June-quarter profit plunged around 76 percent.