After falling for two consecutive days amidst high demand for Coal India Ltd’s initial public offering (IPO), the benchmark Sensex of the Bombay Stock Exchange on Thursday rose by 2 per cent, or 388 points, to close at 20,261 in anticipation that a big chunk of money (that does not get Coal India allotment) will come back to the secondary market.
The broader Nifty rose by 119 points, or 2 per cent, to 6,101.5.
According to experts, the successful completion of the CIL IPO is one reason for the rise in the markets, coupled with global cues. “The market expects that a sizeable portion of the Coal India money that does not get allotment will come back into the secondary market and the markets are rising in that anticipation,” said Alex Mathew, research head, Geojit BNP Paribas Financial Services.
Domestic participants primarily drove the rally as FII investment in the secondary market stood at R145 crore.