India : Europe drives Sensex, Nifty to new 10-mth high; PSU Bank up 2.6pct

Europe-led strength in last hour of trade helped the equity benchmarks end at fresh 10-month closing highs on Thursday. Even the likely meeting between NDA and Congress over various issues of Goods & Services Tax (GST) and possible announcement of new RBI governor by weekend also lifted sentiment. Banking & financials, auto, infra and FMCG stocks led the support.The 30-share BSE Sensex was up 126.93 points or 0.46 percent at 27942.11 and the 50-share NSE Nifty gained 45.50 points or 0.53 percent at 8565. The broader markets also participated in late uptrend as the BSE Midcap and Smallcap indices were up 0.5-0.7 percent.

Nirmal Jain of IIFL said India remained in good stead. “We are seeing that a lot of policy reforms are taking place. Now there is direction to many things… hopefully if monsoon also is good, and GST can go through, all those things put together will put us on a very good sort of platform for a bull market.”

European markets rallied after the UK’s new Prime Minister Theresa May took office and named her cabinet, bringing stability to the country’s political scene post-Brexit. Globally investors also expect easier monetary policy from central banks. Germany’s DAX index crossed the 10,000 mark, up around 1.4 percent while France’s CAC gained 1 percent and Britain’s FTSE was up 0.8 percent.

Meanwhile, ahead of the Monsoon Session of Parliament (that will begin from July 18), the Narendra Modi government reached out to the principal opposition party Congress over the contentious issue of Goods and Service Tax Bill. Union Minister Venkaiah Naidu spoke to senior Congress leaders Ghulam Nabi Azad and Anand Sharma. Both Congress leaders assured Naidu that they will get back to him soon after consultations within their party.

Logistics stocks gained strength on hopes of GST Bill getting passed in Monsoon session. Gati, Snowman Logistics and Patel Integrated Logistics rallied 8-9 percent.