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The 30-share BSE index closed 900 points or 1.53% higher at 59,809, while the broader NSE Nifty settled 272 points or 1.57% higher at 17,594.
Both benchmarks posted their best day since November 11. Forty-two of the Nifty 50 constituents advanced, with Adani Enterprises climbing 16.94%. The firm, which has a more-than-10% weightage on metals, helped the index gain 3.55%.
Here are the key factors behind today’s market rally:
* PSU Bank, metal stocks lead market gains
Strong buying was witnessed in banking quarter, especially the PSU Bank stocks were the top market winners today, led by India’s largest lender State Bank of India (SBI).
All the 13 major sectoral indexes rose. High weightage financials added nearly 2%.
Reliance Industries, the company with the highest market capitalisation in India and weightage in the Nifty 50, rose 2.55% on Friday.
Tata Steel gained over 2% on multiple block deals while NTPC jumped to a three-month high after global brokerage firm Morgan Stanley’s positive commentary on the company’s growth prospects.
* Adani investment boost
All shares of Adani Group firms were also trading higher for the fourth straight day, boosted by fresh round of measures undertaken by the conglomerate to restore investors’ trust.
In fact, reports of US-based GQG Partners’ $1.87 billion investment in Adani stocks helped markets look past rate-hike worries for the moment, turning foreign investors into buyers after a six-session hiatus.
This is first major investment in the group since a short-seller’s critical report on Januray 24 sparked a stock rout.
“The funding will assuage concerns about Adani Group’s ability to raise funding for repayment of loans,” Aditya Mongia and Teena Virmani of Kotak Institutional Equities told Reuters.
* Adani’s SC verdict raised hopes
A day ago, the Supreme Court formed a 6-member expert panel to be headed by former apex court judge Justice A M Sapre to look into protection of Indian investors after the Hindenburg report created market rout in the group’s shares.
The SC aslo asked Sebi to probe within two months allegations of stock price manipulation by the Adani group and any lapses in regulatory disclosures.
The court-appointed Justice Sapre panel, which will be provided assistance by the Centre and other statutory agencies including the Sebi chairperson, will have to submit its report in a sealed cover within two months.
* Strong service sector growth
The Indian services sector expanded at the strongest rate in 12 years in February supported by favourable demand conditions and new business gains, a monthly survey said on Friday.
The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 57.2 in January to 59.4 in February — its highest level in 12 years.
For the 19th straight month, the headline figure was above the neutral 50 threshold. In Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.
* Fed rates
President of the Federal Reserve Bank of Atlanta, Raphael Bostic expressed support for raising the Fed’s key lending rate by less than what many investors are forecasting. Bostic said the Fed might be able to suspend additional rate increases by mid-year, sooner than some expect.
His comments came as a welcome cheer to global investors as it raised hopes that the US central bank might not step up anti-inflation fight as much as feared.
showed fewer Americans applied for unemployment benefits last week despite interest rate hikes to cool business activity. That is positive for workers, but the Fed worries strong employment might fuel inflation.
Traders have raised forecasts of how high the Fed will raise rates and for how long.
* Global markets rise
Global markets also advanced tracking US Federal Reserve’s statement on rate hikes.
Wall Street rose on Thursday for the first time in three days after Bostic’s comments.
In Asia, the Shanghai Composite Index rose 0.5% to 3,326.92 after a central bank official said China’s vast real estate industry was recovering from a slump triggered by debt controls that led to a wave of defaults by developers, rattling global financial markets.
The Nikkei 225 in Tokyo gained 1.6% to 27,934.01 after Japan’s unemployment rate edged lower in January.
The Hang Seng in Hong Kong gained 1.2% to 20,555.46 and the Kospi in Seoul was 0.2% higher at 2,432.07.
(With inputs from agencies)
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