India’s share benchmark Sensex touched the 29,000-level while Nifty breached 8,950-level in intraday trade on Wednesday over optimism that the economy weathered the demonetisation impact and as US president Donald Trump announced plans to cut taxes and spend $1 trillion to upgrade infrastructure.
The Sensex opened up and hit 29,029.17 in late afternoon as investors rejoiced a robust 7% growth in GDP during the demonetisation drive of December quarter.
The Sensex closed up 241 points or 0.8% at 28,984.49 while Nifty finished 0.75% higher at 8,945.80.
Tata Steel led the Sensex chart gaining 3.7% followed by M&M 3.1%, Dr Reddy’s 2.6% and ITC 2.5%.
Global markets turned bullish after Trump’s speech to a joint session of Congress especially after he outlined plans to invest $1 trillion in infrastructure and cut taxes.
“Right now, American companies are taxed at one of the highest rates anywhere in the world. My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone. At the same time, we will provide massive tax relief for the middle class,” Trump said.
As part of a national rebuilding plan, Trump said “I will be asking the Congress to approve legislation that produces a $1 trillion investment in the infrastructure of the United States, financed through both public and private capital, creating millions of new jobs.”
In Asia, Nikkei ended up 1.44% while Hang Seng gained 0.15%, Kospi 0.3% and Shanghai 0.15%.
Europe opened up with FTSE-100, DAX and CAC-40 trading in green.
Trump’s stimulus plan comes close on heels of his announcement of a hike in defence spending by $54 billion in his first budget.
A stimulus in the US is expected to bolster growth in the world’s largest economy and lift other economies as well. However, an expansion budget could fan inflation in the US and prompt Federal Reserve to become aggressive in raising rates in coming days.