Experts said investors are lapping up any green shoot in the economy
The benchmark indices
logged a fresh high on Tuesday since the global outbreak of Covid-19 after gaining sharply for the fourth straight day. Stocks extended gains on optimism around the US stimulus and a positive outlook given by India’s largest housing finance firm.
The Sensex rose 601 points, or 1.54 per cent, to end at 39,574 — the highest since February 27. The Nifty 50 index rose 159 points, or 1.4 per cent, to end at 11,662. Both benchmark indices
have rallied over 7 per cent and posted gains in six of the past seven sessions.
In an exchange filing, Housing Development Finance Corporation (HDFC) said its loan business has improved in the second quarter. According to the filing, HDFC's loan disbursements during the September quarter were at 95 per cent of the level in the corresponding quarter last year.
Shares of HDFC rose 8.4 per cent. Other HFCs also posted strong gains — GIC Housing Finance rose 12.3 per cent, LIC Housing Finance jumped 5.2 per cent, and Repco Home Finance hit an upper circuit.
Experts said investors are lapping up any green shoot in the economy.
The India Services Business Activity Index, compiled by IHS Markit, stood at 49.8 in September, against 41.8 in August. It rose for the 5th straight month. With the manufacturing activity improving, the Composite PMI Output Index rose to 54.6 in September, from 46 in August.
"The market is booming to a new level in anticipation of better Q2FY21 results, a clear improvement in the domestic economic data, and an uptick in the global market," said Vinod Nair, head of research, Geojit Financial Services. Overseas investors bought shares worth Rs 1,102 crore, while domestic institutions pulled out Rs 935 crore on Tuesday.
Hopes of US lawmakers reaching an agreement over the stimulus package also boosted sentiment. On Sunday, Nancy Pelosi, the Democratic speaker of the House of Representatives, said lawmakers were "making progress" on a coronavirus
support package to restore some of the expanded US unemployment benefits that were cut off at the end of July. Over the weekend, American President Donald Trump, on Twitter, had been urging the lawmakers to get the deal done.
Pelosi and Treasury Secretary Steven Mnuchin are attempting to bridge a still-yawning gap between the Democratic $2.2-trillion proposal and the $1.6-trillion White House offer. Last week, Democrats in the House had passed a $2.2-trillion stimulus package, though Republicans and the White House signalled resistance to the scale of the Bill. Uncertainty over the financial aid and a slow economic recovery had kept investors on tenterhooks in September.
The economic data from the US on Monday showed activity in the broader services industry has risen to the levels seen before the Covid-19 outbreak. The ISM Purchasing Manager's Index for the services sector rose 0.9 per cent to 57.8 per cent in September -- the fourth consecutive month of growth.
"We're currently dancing to the global tunes. However, we may see a shift in the focus with the beginning of the earnings season. Besides, the RBI has announced the new dates for the MPC meet. We, thus, expect the rate-sensitive pack to remain volatile in the near future," said Ajit Mishra, VP-research, Religare Broking.
More than 150 stocks hit their 52-week highs, and 287 stocks were locked in the upper circuit on the BSE. The market breadth was positive with total advancing stocks at 1,512 and those declining at 1,196 on the BSE. Finance and Realty stocks rose the most, and their gauges gained 3.04 per cent and 2.4 per cent, respectively.