Sensex, Nifty up over 2% on china interest rate cut
- Indian stock market recovered the preceding day's losses and was about 2.5% today
- Sensex was up 1,305.79 points, or 2.47%, at 54,098.02
- Nifty was up 396.40 points, or 2.51%, at 16,205.80
All sectoral indexes are in the green, with the auto, financials, healthcare, real estate, metals, oil & gas, and capital goods indices each gaining 2%. The BSE midcap and smallcap indexes both rose by more than a per cent.
The top positive movers were RIL, HDFC Bank, Infosys, ICICI Bank, and HDFC, while the most active stocks were Reliance Industries, Infosys, TCS, and ITC. Approximately 2394 shares increased, 598 decreased, and 115 were unchanged.
The following are the factors that are causing the market to rise:
China slashes key lending rates:
China dropped its five-year loan prime rate (LPR) by 15 basis points on May 20, a steeper decrease than anticipated, as the government seeks to cushion an economic slowdown, although the one-year LPR remained constant. The five-year rate has an impact on mortgage pricing.
According to Reuters, senior officials have committed more steps to combat a downturn in the world's second-largest economy, which has been plagued by COVID-19 outbreaks, which have triggered rigorous measures and travel restrictions, creating massive interruptions to operations.
The Chinese central bank has committed to increasing assistance for the slowing economy, but economists warn the room to soften policy may be limited as the US Federal Reserve hikes interest rates.
Boost from Asian markets:
All Asian markets were trading in green with Taiwan Weighted strengthening 138.37 points or 0.86% to 16,158.69, Nikkei 225 surged 315.58 points or 1.2% to 26,718.42, Jakarta Composite soared 119.11 points or 1.75% to 6,942.45, Straits Times advanced 40.97 points or 1.28% to 3,231.68, KOSPI rose 47.40 points or 1.83% to 2,639.74, Shanghai Composite gained 34.44 points or 1.11% to 3,131.40 and Hang Seng increased 368.95 points or 1.83% to 20,489.63.
Finance Minister sees a quick rebound and 8.9% GDP growth:
According to Finance Minister Nirmala Sitharaman, India's economic growth in the current fiscal year is expected to be robust at 8.9%, the highest among all significant economies, highlighting the country's strong resilience and rapid recovery.
She also expressed optimism that India will maintain its strong growth rate in the coming fiscal year, according to a statement from the finance ministry.