The Sensex extended Wednesday’s monstrous 600-point rally by rising for the third day. The benchmark index today rose over 250 points at day’s high by reclaiming the 36,000 mark, extending the gains to around 1,100 points in three days. A rebound in global equities, subdued global oil price and expectations of a pro-growth polices from new Reserve Bank of India governor has fuelled the rally, say analysts. At 11:48 am, the Sensex was off day’s highs, trading 150 points higher while Nifty traded at 10,785. The rally comes despite Monday’s surprise resignation of Urjit Patel as RBI chief and the setback suffered by the BJP in state elections. Acting swiftly, the government on Tuesday appointed Shaktikanta Das, a former finance secretary, as new RBI chief, calming a jittery market.

Here are 10 updates from the stock market

1) In his first public comment after assuming the charge of RBI, Shaktikanta Das struck a dovish tone on prospects for inflation and also hinted that the RBI might adopt a more growth-friendly monetary framework under his watch. He also said that banking sector would be his key focus and more measures were needed to revive lenders.

2) Financial stocks have led this round of rally on Dalal Street. Today, HDFC Bank, HDFC, Yes Bank, and SBI were among the top Sensex gainers.

3) Adding to stock market rally, bonds also rose today after inflation eased sharply in November, bolstering expectations of a RBI rate cut sooner than expected. The 10-year benchmark bond yield fell to 7.38% in early trade from 7.41% in the previous session. Markets also hope for liquidity easing measures from the new RBI chief, who said that there was a need to interact with stakeholders on liquidity issues.

4) The rupee also strengthened as US-China trade tensions eased. The rupee also strengthened to 71.70 a dollar, compared with previous close of 72.01.

5) Data released yesterday after market hours showed consumer inflation falling to a 17-month low of 2.33%, driven by falling food prices, and below the RBI’s medium term target of 4%.

6) Falling oil prices in recent months have eased inflationary pressure on India, a major fuel importer. Since early October, Brent crude prices have dropped by nearly 30% to about $60 per barrel. This has also helped the rupee rebound from October lows of 74.48 a dollar.

7) Separately, data released yesterday also showed India’s industrial output expanded at an annual 8.1% pace in November, the highest in 11 months, compared with a forecast of 5.7%.

8) Some economists expect the RBI will change their monetary policy stance to ‘neutral’ in February from ‘calibrated tightening’ currently, making a rate rise less likely. The RBI may even ease monetary policy to support growth, they say.

9) Global markets have also rallied on signs of easing China-US trade tensions and expectations that China will step up efforts soon to support its cooling economy. US President Donald Trump on Tuesday said trade talks were under way with China. A Reuters report said that China made the first major purchase of US soybeans since Washington and Beijing agreed to a temporary trade truce this month.

10) Trump also said he would intervene in a case against a top executive at Huawei Technologies if it would help secure a trade deal.

With Agency Inputs

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