Mumbai, Dec 8: Bulls retained control of Dalal Street for second consecutive session Friday as follow-through buying lifted equity benchmarks and broader markets 1 percent each ahead of the first phase of Gujarat elections tomorrow.
Positive global sentiment and continued value buying across sectors barring PSU banks & technology helped the Sensex close above psychological 33,000-mark. The 30-share BSE index rose 301.09 points or 0.91 percent to 33,250.30 today and rallied more than 650 points in two straight sessions.
The 50-share NSE Nifty gained 99 points or 0.97 percent at 10,265.70 while the Nifty Midcap ended above 20,000-mark, rising 0.93 percent to 20,014.75.
The sharp bounce back in last two sessions was after losing over 400 points from record high of 10,490 levels on the Nifty.
Experts remain positive on Indian equities, citing likely improvement in corporate earnings and economic growth from second half of FY18 onwards. Two-day rebound indicated that investors want to buy every big fall in market despite short term concerns. They may be preparing for the outcome of Gujarat elections.
Saion Mukherjee of Nomura said the research house is bullish on India Equities with Nifty December 2018 target of 11,880.
“Business is on the cusp of an upcycle which will drive strong earnings growth as corporate earnings-to-GDP ratio is at its lows, with significant contraction in margins and return on equity,” he reasoned.
This is also supported by stable macro fundamentals and clean-up in the system in terms of stressed assets and unprofitable players, he said.
Global markets were higher on progress in Brexit negotiations and better-than-expected China trade data. European stocks like Germany’s DAX gained 1.25 percent and France’s CAC was up 0.66 percent at the time of writing this article. Among Asian markets, Japan’s Nikkei and Hong Kong’s Hang Seng closed higher by more than 1 percent.