Mumbai, July 1 (IANS) Indian stock markets are likely to open on a bullish note Monday, after registering a strong rally in the previous week, on expectation of a push to reform process.
The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), ended the week at 17,429.98 points, up 2.70 percent or 457.47 points from its previous close at 16,972.51 points.
This was the fourth weekly gain in the benchmark Sensex. The BSE barometer registered a strong rally in June. It has gained 9.18 percent or 1,464.82 points in June, one of the sharpest rally in the recent months.
The market rallied strongly towards the end of the month, after Prime Minister Manmohan Singh took over finance portfolio following Pranab Mukherjee’s nomination for presidential election by the ruling United Progressive Alliance.
The prime minister has signalled a course correction and emphasised the need for reviving “animal spirit” in the economy.
This sent a positive signal to the market, leading to a strong rally towards the weekend.
The benchmark Sensex surged 2.59 percent or 439.22 points Friday, the last trading day of the week.
Buying interest was across the board, with all the sectoral indices closing in the positive. In fact, of the 30 scrips that form Sensex, only one ended in the red Friday.
Coal India closed 0.14 percent down at Rs.347.40. All other Sensex scrips ended the week on a positive note, with 19 gaining more than two percent.
The wider 50-scrip S&P CNX Nifty of the National Stock Exchange climbed 2.52 percent at 5,278.90 points, the highest closing level in 10 weeks.
The finance ministry proposal that the controversial general anti-avoidance rules (GAAR) would not be applicable on participatory notes, through which many foreign investors invest in India, boosted foreign investors confidence in the markets.
The guidelines also call for a monetary threshold for implementation of GAAR.
The Reserve Bank of India’s (RBI) move to hike overseas investments limit in government bonds also sent a positive signal to the market and helped revive the battered currency.
The limit of overseas investment in government bonds has been raised by $5 billion to $20 billion.
These measures would continue to have a positive impact on the markets in the coming weeks as well, the analysts said.
“This will have some impact on capital flow of the country. Any inflow of funds should help the currency,” chairman of the the Prime Minister’s Economic Advisory Council C. Rangarajan said while reacting on the RBI move.
