The post-Budget rally in stocks extended for the third day, with the benchmark indices closing up 1.50%, on the back of continued inflows from foreign institutional investors and gains in other Asian markets.
The BSE Sensex closed at 24,606.99, up 364 points or 1.50% and the wider NSE Nifty50 index closed at 7,475.60, up 107 points or also 1.50%. The Sensex has risen over 1,600 points since Tuesday, its best three day gain since September 2013.
The market has been buoyed by the government sticking to its fiscal deficit targets in the Budget. International Monetary Fund projecting a higher growth for India at 7.5% in 2016-17, also boosted sentiments.
“The fiscal deficit adherence is a good thing. It allows RBI to cut rates. It allows rating agencies to upgrade India rating. It allows inflation to be low and reassures investors. It helps re-rate the valuation. There is a bit of short covering also,” said Nilesh Shah, MD, Kotak Mahindra AMC.
As per stock exchange data, FIIs bought shares worth Rs 912 crore on Thursday. On Wednesday, FIIs were net buyers worth Rs 1,438 crore.
On the 30-share Sensex, 26 stocks rose on Thursday. Tata Steel was the biggest gainer, up 7.2%. Among other major gainers, BHEL, Tata Motors and Larsen & Toubro rose more than 6%.
Most Asian markets also ended positively, while European stocks were mixed.
The Rupee also strengthened further for the fifth consecutive session. It closed at 67.34 to a US Dollar, versus its previous close of 67.55.