Mumbai : Global cues such as an ease in US-China trade tension and dovish US Fed remarks, along with improving liquidity condition and a strong rupee, led the Indian equity markets to close Monday’s trade on a positive note.
Besides, expectations of higher domestic economic growth rate and positive quarterly results buoyed investors’ sentiments.
Consequently, the two key indices — Sensex and Nifty50 — advanced over 0.40 per cent as positive sentiments continued from Friday following reports of US-China trade talks, which was supported by strong US jobs data and a dovish tone by the US Federal Reserve.
“Asia and Europe advanced as a relatively dovish turn by the Federal Reserve, strong US jobs data and optimism over US-China trade talks,” Abhijeet Dey of BNP Paribas Mutual Fund said.
The US-China trade talks scheduled from Monday assumes special significance. Madhavi Arora of Edelweiss Securities, said: “The stakes are high as both sides face a resumption of tariffs in March if they don’t strike a deal.”
The two economic giants have agreed on a 90-day trade truce in early December.
Index-wise, the BSE Sensex settled 155.06 points or 0.43 per cent higher at 35,850.16 points after touching an intra-day high of 36,076.95 and a low of 35,809.23.
The NSE Nifty50 closed at 49.25 points or 0.46 per cent up at 10,776.60 points.
“Oil prices gained some strength on the back of supply cut by OPEC, which came into effect from January 1, and on hopes of an agreement between US-China on trade talks this week,” said Vinod Nair, Head of Research, Geojit Financial Services.
“On domestic front, easing liquidity situation, appreciation in INR and selective buying in FMCG, IT and private banks on expectation of strong earnings lifted sentiments.”
In addition, RBI Governor Shaktikanta Das on Monday said the apex bank is constantly monitoring the liquidity situation of Non Banking Financial Companies (NBFC), whose representatives he would meet on Tuesday.
Sector-wise, realty stocks gained on expectation that the GST Council meeting scheduled for January 10 will end with a cut in the GST rates for the under-construction houses from 18 to 12 per cent.
In contrast, auto and healthcare sectors ended lower.
The rupee grew stronger by 4 paise to Rs 69.68 per dollar from its previous close of 69.72.
“Technically, with the Nifty moving up further, traders will need to watch if the recent gains can sustain in the near term. Further upsides are likely once the immediate resistances of 10,836 are taken out,” said Deepak Jasani, Head – HDFC Securities Retail Research.
“Crucial supports to watch for resumption of weakness is at 10,741.”
The chart toppers were Axis Bank, Tata Motors and Tata Motors(DVR), which gained over 2 per cent. Other top gainers were NTPC and Infosys, which inched up in the range of 1 to 2 per cent.
In contrast, Bajaj Auto lost the most, 2.82 per cent, followed by Yes Bank declining 1.35 per cent, while Hero MotoCorp lost 1.11 per cent. Bajaj Finance and Sun Pharma shed 1.03 per cent and 0.64 per cent, respectively.