Sensex jumps 400 points; banking, NBFC stocks rally
Markets welcomed the appointment of new RBI governor Shaktikanta Das, who is expected to have a more dovish view
Mumbai: Indian markets today opened stronger after investors welcomed the quick appointment of new RBI governor, Shaktikanta Das, who is expected to have a more dovish view. Gains in Asian markets on signs of cooperation between the US and China on trade also encouraged risk-taking. At 10.34 am, the Sensex was trading at 35542.98, up 392.97 points, or 1.12%, while the Nifty stood at 10,666.80, gained 117.65 points, or 1.12%.
The government on Tuesday announced Shaktikanta Das as Reserve Bank of India’s new governor, a day after Urjit Patel resigned amid differences with government. Indian rupee weakened amid concerns on independence of RBI.
“The market perhaps believes that the departure of the RBI governor could lead to relaxation in certain regulations for the banking sector (higher liquidity, relaxation of PCA framework, dilution of promoter ownership rules) and a more liberal monetary policy,” said Kotak Institutional Equities in a note to its investors.
Banking and non-banking financial companies stock rallied. Among banking stocks, Corporation Bank was up 6%, Dena Bank 4.3%, UCO Bank 4.3%, Central Bank of India 4%, Yes Bank 3.5%, Indian Overseas Bank 3.4%, Andhra Bank 2.6%, Syndicate Bank 2.6%, Allahabad Bank 2 and Bank of India 2%.
Among NBFC stocks, Indiabulls Housing Finance rose 2.5%, Edelweiss Financial Services 1%, Can Fin Home 2%, IIFL Holdings 1.7%, Bajaj Finance 1.5% and Bajaj Finserv 1.3%.
On the results of state elections, where BJP suffered setbacks, Care Ratings in a note said: “The elections results evidently are not taken too seriously (by markets) which is logical as it does not prima facie indicate a change in any policy per se. There could be some changing priorities on the fiscal side but the market is willing to wait rather than speculate.”
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